Regulation of Hedge Funds in Selected Single European Jurisdictions: Italy, France, Ireland, Luxembourg, Malta, and Switzerland—The Impact of the AIFM Directive

Fagetan, Ana Maria

This chapter examines the laws and regulations governing hedge funds in Italy, France, Ireland, Luxembourg, Malta, and Switzerland in order to contrast and compare, at least to a certain extent, the position in these above-mentioned different jurisdictions. Therefore, this chapter provides a comparative summary of the legal forms applicable to hedge funds in six jurisdictions, five EU member states plus Switzerland. The author has chosen Ireland, France, Luxembourg, Malta, and Italy because they are relevant from the point of view of the diversity of regulatory frameworks that coexist in the EU. In addition, the chosen European countries represent the countries with highly developed financial sectors inside the EU. Although Switzerland is not an EU member, it is also included in the analysis, mainly because, in the international financial world, Switzerland is an important player and accordingly, especially as a consequence of its foreign policy, many, if not all global financial organizations are to some extent present in Switzerland. The analysis focused mainly on the post-crisis period, when the implementation of the AIFMD, UCITS IV and V, and MiFID II has started. Currently regulation turned into a key strategic factor as it enhanced increased transparency, which lead to the enforceability of compliance and thus protects booth clients and investors. In light of this, regulation needs to be comprehended as a major responsibility in risk prevention and investor protection. Particular interest was given to the shaping of the local regulatory framework dealing with hedge funds, focusing mainly on investor protection and transparency, which have climbed up on the international political agenda of each country, in order to comprehend if tighter regulations have a beneficial impact on the hedge funds industry or not. Also, particular attention was paid to Brexit, a subject of fervent discussion for the last four years, at least, and which will continue to be one of the most disputed issues for some years from now on.