According to the body, wide-ranging reforms could cover hedge funds, CDS and private equity as part of a strategy to increase confidence within the sector.
Michel Barnier, EU internal markets commissioner, was quoted by iMarketnews.com, as saying that he hopes for a âgood agreementâ with the US and other nations on new regulations for âalternative investmentsâ.
"80 per cent of these (instruments) are exempt from regulation ... we need to invert those percentages,â he explained.
New proposals from the EC could be unveiled as soon as June, reports have claimed.
The use of CDS has come under recent scrutiny by governments and financial regulators following their role in Greeceâs economic crisis.
Investment banks including Goldman Sachs are alleged to have used CDS to massage Greeceâs debt figures.
However, while governments have claimed that greater regulation of these derivatives is required, both the US and the UK have questioned the worth of an outright ban on the trades.
By Jim Ottewill