Socialist MEP Peter Skinner hails the deal to control hedge funds and private equity schemes as a victory for Parliament.

Interview: Investment will not be stifled

https://api.multimedia.europarl.europa.eu/documents/20125/15284105/n003-0091-en.srt

Peter Skinner, British Socialist MEP  on the Economic Affairs Committee.

There is a deal on alternative investment  funds, hedge funds and private equity.

How far is it in line with  the EP's position?

It goes a long way in terms of  the transparency issue.

Now we can find  who is behind these funds,

where they come from  and what kind of people

ask companies in which  they may be involved to do certain things.

Parliament's emphasis on transparency  has been a big win for the day.

France and Germany opposed passports  for non-EU based fund managers.

That was a parliamentary victory  but it had already won at Ecofin

because the Belgian compromise, tabled  a couple of weeks ago, was adopted.

and for the EU to work anything  that is passed through in one country

I'm glad that it's been pushed through  although it's been staggered.

The first phase will mean that those  people who are European fund managers

will be able to obtain  a passport from 2013,

and from 2015 for  non-EU fund managers.

So the phasing in of passports  is staggered but it's still good news.

that are overseen by financial controllers,  like the UK's Financial Services Authority,

will continue until they figure out how well  the passport scheme is working.

Yes that's right.  It's called the national placement.

So local regulators who have  the best understanding

of what these organisations are doing  will be allowed to continue this practice

until 2018 when they will be reviewed,  but it doesn't mean that they'll end.

To be honest  it's a pretty good compromise:

if the Commission wants to it can call  a halt and say it hasn't worked

or maybe we could have  co-existing systems.

So in the spirit of compromise  we've got something in the middle.

There was concern over the idea that  depositaries would have responsibility.

They would be financially liable for  the funds if they went bottom up.

Is that a victory as well?  -Absolutely.

where there was little difference between  depositaries and fund managers

there were clearly concerns over  protection for investors.

That's something I pushed for,  so I'm very pleased that we've enhanced

the rules by which depositaries  will be expected to play.

It's a victory for common sense  and investor protection.

When I was in the City of London  in March of this year

I talked to people from hedge funds  and private equity firms.

They said that it's one size fits all rule:

rules that apply to some hedge funds  don't apply to others or private equity,

they are different and too many politicians  don't understand those differences.

There's room to breathe with this  and the first thing to be said to the critics

is that it could have been much worse  from their perspective.

The reality is that to obtain tighter rules  we had to register,

and we have a central register,  all the fund managers and organisations.

We have rules that can be applied across  27 Member States.

So we had to have a level of compliance  that fits all states, which is difficult.

But we have something that was expected  to be one way that has moved slightly.

There's a certain generosity in this,  and I hope it'll be used in this respect.

Asian fund managers met a few days  ago to try to influence matters

as they were afraid that they would be  shut out of the market place.

That hasn't happened has it?  -No, in fact national placement,

and fund managers being able to have  a passport across the EU after 2015

is a victory for  non-EU fund managers and funds.

Given all the prior discussion,  these rules allows us scope to breathe

whilst that time exists to review  the operation and see if it's adequate.

What about the City of London's warnings  that its revenues would suffer?

Some say the new rules  may boost the City of London.

At last we have rules.  People should welcome this fact.

Everyone agrees on that,  but we have to make sure that

people allow these rules  to work including regulators.

The FSA can still do the national  placement, which is a good thing,

alongside the development of  EU regulations,

which will be good for many of companies  that want to do business in the EU.

So the fears of the tabloids and some  broadsheets will not be realised.

I think you've started to answer  the question for me.

Peter Skinner, thanks very much indeed.  -Jim, thank you.