Commission holds hearing on PE regulation

The EU Commission has held its hearing into private equity regulation and conduct in Europe, in what many hope will be a step towards a conclusion of the long-running political debate.

Prior to the conference, an industry taskforce led by EVCA chairman Jonathan Russell presented a report to the commission, which called for a unified set of professional standards to be applied across the continent.

According to Javier Echarri, EVCA secretary general and a member of the taskforce: "The paper shows the industry is prepared to engage with regulators and wants to have a proper discussion about its activities. It also shows we strongly believe private equity is part of the solution to the current economic difficulties, as this is one of the few finance industries that still has capital."

The report itself was designed to provide the commission with a full account of the risk and existing national regulation relating to the industry, which varies widely in different jurisdictions. To answer this, the report calls for a single set of principles-based unifying professional standards to be imposed across Europe. Moreover, in contrast to any previous rulings governing the asset class, these would move beyond a voluntary code and be enforceable by a newly created independent body. "It's about moving up a gear, with principles being brought in at European level and implemented at national level, which will allow sufficient flexibility and will fit with the existing regulation already in place in different countries," explained Echarri.

The commission could still decide to regulate at EU level however, and industry representatives expect a final decision by June.

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