Hedge funds 'may opt out of bonus rules'

17 November 2010

UK hedge funds may be given the chance to avoid incoming European limits on individual bonus payouts if regulators are satisfied they have a valid reason to do so, it has been claimed.

Bloomberg has reported that sources close to discussions have revealed that the Financial Services Authority (FSA) may grant funds the option to explain why they should opt out of rules dictating that half of bonuses must be paid in shares.

"There is a growing sense that this approach is firming up," said partner Darren Fox of legal firm Simmons & Simmons. "The panicky calls from clients have reduced. People seem to be less concerned."

In addition, the FSA may be prepared to push back the deadline for compliance with the new rules from January 1st to July 2011.

Last week, Man Group chief executive Peter Clarke criticised the government's plans to abolish the FSA and told the Financial Times that the hedge fund industry could be hit by regulatory "uncertainty" as a result.

By Gary Cooper

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