US funds can 'passport' into the EU
Hedge funds from the United States, Singapore and Hong Kong should be allowed to market themselves in the European Union, the bloc's financial watchdog said yesterday.
Equivalence will allow the much bigger US mutual funds sector as well as hedge funds to operate across the EU, ESMA had said.
The long-delayed recommendation from the European Securities and Markets Authority (ESMA) to the EU's executive European Commission for endorsement is a taste of what Britain's financial services sector might face after it leaves the bloc.
A new EU law requires ESMA to say for the first time if rules for financial firms in non-EU countries meet the standard inside the 28-country bloc. A positive view means that asset managers based outside the EU get a "passport" to continue offering services to investors across Europe, replacing a system of country-by-country authorisation. ESMA gave the green light to hedge funds from Canada, Guernsey, Japan, Cayman Islands, Jersey, Australia, and Switzerland, with provisos for some of them.