Jennifer Harris

Jean-Paul Gauzes, the rapporteur for AIFM, has suggested a way of replacing the controversial third-country rules.

Despite Timothy Geithner’s assurances to EU finance ministers, new rules for alternative investment fund managers are still being volleyed in Congress.

In a second letter to EU finance ministers, US Treasury Secretary reiterated his concerns with the ‘anti-competitive’nature of the AIFM Directive’s third-country rules. Geithner also discussed some of the financial regulatory initiatives that the US is working on.

The US Treasury Secretary said in a second letter the US is bolstering its regulatory approach to alternatives with registration requirements.

New rules being mulled in both the US and Europe would shrink the universe of LPs allowed to invest in private equity funds.

PEM spoke with Dechert partner Olivier Dumas about why the French believe carried interest merits capital gains tax treatment.

The two firms cited changes to the tax status of carried interest and the possibility of having to register with the SEC as investment advisors as threats to their businesses.

EVCA, the US Treasury Secretary, ILPA and EMPEA have all recently voiced concern about measures in the AIFM that would block the free flow of capital. Nicholas Sarkozy and Gordon Brown reportedly planned to discuss the issue Friday.

Speakers and delegates at this week’s EVCA Investor Forum voiced concerns about potential protectionist measures in the AIFM directive, an issue on which the US Treasury Secretary and ILPA have also spoken out this week.

Sander Levin, who previously backed bills to tax carry as ordinary income instead of capital gains, will chair the House Ways and Means Committee.