The global hedge fund industry association, Alternative Investment Management Association, (AIMA) said in a statement that they welcome the impact assessment of the European Commission’s draft directive on Alternative Investment Fund Managers commissioned by the UK’s Financial Services Authority.

The FSA has commissioned CRA International to undertake a CBA (cost benefit analysis) of the proposed directive. Some of the main themes of the brief include: impact on investment portfolios, impact on costs to firms and investors, impact on functioning of markets and the question of systemic risk, and the effect on small company financing and European competitiveness.

AIMA is campaigning for the draft directive in its current form to be revised. Although the association welcomes the parts of the directive which relate to the G20 process such as the reporting of systemically relevant data by managers to their national supervisors and the registration and authorisation of managers, AIMA has argued that there are other elements of the directive (such as the sections relating to leverage, depositaries and marketing) which have been poorly drafted and which will have unintended consequences.

AIMA has also sought an impact assessment of the directive by the European Commission, suggesting that it could impose major costs on a large part of Europe’s financial services industry, reduce Europe’s competitiveness in financial services and as a destination for international investment, and impact Europe ’s citizens through its effect on pensions, savings, jobs and real estate.

Andrew Baker, CEO of AIMA, said, “We’re very glad that the FSA has commissioned this impact assessment for the UK, and we hope that the European Commission will now follow suit at a pan-EU level. It would be extraordinary if there were no proper assessment at a European level of the impact of a directive that could have extremely wide-ranging consequences.”