Conservatives condemn "wrongheaded" proposal to cap fund-manager bonuses

19-Mar-2013 @ 13:0

Syed Kamall Syed Kamall

Anthea McIntyre Anthea McIntyre

Anthea McIntyre Anthea McIntyre

An EU plan to extend bonus-capping powers into the field of investment management has been condemned by Conservative MEPs

The scheme will be discussed by MEPs on the Finance and Economic Affairs Committee on Thursday as they decide the European Parliament's negotiating position on revised regulation of Undertakings for Collective Investment in Transferable Securities (known as the Ucits directive).

The Financial Times today (Monday) reported that a draft position - which currently has the support of a majority of the parliament's major groups - would enforce a maximum 1:1 ratio of bonus to salary. It would also require up to 60 per cent of the variable element to be deferred and be largely paid in units of the fund the manager runs.

But London MEP Syed Kamall, Conservative negotiator on the regulation, pledged to resist the proposal. 
He said: "While it might seem politically attractive to introduce bonus caps for fund managers, it is a wholly inappropriate initiative.
"This appears to be more motivated by a dislike of high salaries than by mitigating systemic risk. 
"I am afraid some MEPs are indulging in the politics of envy rather than looking at what would really make the industry more robust, more open and less prone to financial shock.

"This wrongheaded proposal is potentially bad for the City and bad for a great many other financial centres across the continent. It would also be bad for the EU itself. We will oppose it."

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