In an industry that worships the gods of mammon, there more often than not hangs an air of Soviet political correctness. In many an interview, I have wondered whether a HR commissar will launch themselves through the frosted glass of the meeting room if some unfortunate managing director strays from the party line.
It was wonderfully refreshing therefore to receive an email from Stephane Puel, a Partner at French law firm, Gide Loyrette Nouel, discussing the confusing nature of the EUs draft directive for hedge funds.
While the bulk of the comment intelligently discussed the curious mismatches between MiFID regulation and what is now being proposed, the real gem came tucked away in the final paragraph:
Lastly, something that appears somewhat absurd within the Directive. Alternative managers owned by a bank are exempt from the Directive. This is one of the biggest mismatches. How can an alternative firm owned by a bank be exempt from the Directive when it is probably more exposed to systemic risk; more likely to have conflicts of interest and is probably larger than the average hedge fund?
While undoubtedly one of the more intelligent remarks about the potential EU directive, it is odd for a lawyer to question increased regulation. This is a bit like a journalist turning down a free drink. Still, an insightful comment nonetheless.