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EU says no to hedge fund regulation

Charlie McCreevy, the internal market commissioner of the European Union, has refused to introduce new regulatory rules for the hedge fund industry, saying that hedge funds were good for investors.

Speaking at the European parliament's economic affairs committee, the commissioner said that hedge funds were effective in keeping company managers in line, due to the influence they now have over the companies they invest in.

"My own view on hedge funds is that I don't see a compelling case for specific EU legislation," Reuters reports Mr McCreevy as saying.

"In the main, hedge funds are catalysts for change and put the fear of God in management and boards of companies, which must be to the benefit of everybody."

Hedge funds have come under criticism in recent months due to the power they exert over companies, with many being accused of interfering too greatly in issues of management.

Only last month, hedge fund Third Point attempted to intervene in the running of NABI pharmaceuticals, a company it had invested in, while Highland Capital Management took technology company Motient to court in an attempt to access information about the company's dealings.