A study conducted by a private consulting agency Charles River Associates, was the first official and independent analysis of new rules in this area, which was commissioned finregulyatorom EU member country.
In the 117-page report says that only pension funds are faced with declining returns on invested capital by 1.4 billion euros per year, or on 0,05%.
If investment funds are currently operating in Europe, but registered abroad, wish to move their headquarters to the EU, they will spend 3.2 billion euros a time, to lead its business in compliance with EU rules. In addition, the annual costs of investment companies will increase by 311 million euros. These costs do not include funds needed for the services of banks, custodians and depositories, which can lead to a reduction of annual income on invested capital by another 50 basis points.
However, FSA acknowledges that the new rules will have beneficial effects on the financial system in Europe, as they contribute to greater transparency.
Initial plans to introduce new rules came in April this year, and then subjected to severe criticism from hedge funds and private equity firms, most of which are located in the UK.
This, however, does not affect the determination of Brussels to impose restrictions. The new revised version should appear in late December.
Directive will require managers of hedge funds to register with finregulyatorah EU, as well as to transfer a significant part of the operations of the offshore zones. In addition, investment funds will have to meet stringent capital requirements and to observe the relationship between equity and debt capital. All this, according to critics of the project, may lead to the fact that many alternative funds to leave Europe.
In general, the study says Charles River Associates, 40% of all hedge funds and 35% of private investment companies in the world will not meet the new requirements of the EU.
Earlier reports said that the UK's largest hedge funds have warned the Ministry of Finance of the country that they may be forced to abandon their business in Europe, if the draft EU directive on the regulation of this sector will not be radical changes.
Some companies, mainly those located in the Cayman Islands, is owned by the UK, have already begun to prepare for redeployment in Switzerland, if the draft directive will not be changed. Some hedge funds may relocate to New York.
The European Commission intends to impose restrictions on the involvement of hedge funds and certain other investment company borrowings. This new regulation would require to take into account many derivatives as borrowed funds.
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