The European Union may soften proposed regulations on managers of private equity firms by blocking plans to introduce harsh reporting requirements for the companies in which they invest.
Belgium, which holds the rotating presidency of the European Union, said proposals for “public disclosure of sensitive information, such as strategic and development plans” may make it harder for companies owned by private equity to compete, according to a document obtained by Bloomberg News.
“When imposing additional transparency requirements solely on the private equity sector, utmost caution is required as to avoid discrimination and unwanted distortion of competition,” said the document, which was circulated to lawmakers involved in negotiations on the proposed rules.
Lawmakers, national governments and the European Commission have yet to strike a deal on private equity disclosure, hedge fund marketing rules and so-called passports for the funds to operate throughout the 27-nation region. The European Commission proposed the law last year to regulate alternative investments such as private equity and hedge funds.
The U.K. is home to 80% of Europe’s hedge fund management industry and 60% of private equity firms, according to a report last year from the Financial Services Authority.