Andrew Baker, Aima chief executive, says there are provisions in the directive which have potentially serious consequences for managers, investors, service providers and advisers internationally.

He says the draft directive has created enormous confusion among hedge fund managers.

'Because of the lack of proper consultation the directive presumes a structure for the industry which bears little relationship to reality. Implementation in its current form could prove to be unworkable. It also appears to be in conflict with much of existing EC financial services legislation,' says Baker (pictured).

'We will therefore call for urgent effort to be devoted to re-drafting this directive. And we will seek to have excluded those provisions which are the most damaging and to prevent those who wish to make the directive even more punitive from prevailing.' 
 
To achieve this, Aima will be announcing a series of initiatives that aim to mobilise the industry.

It says some of the provisions, such as manager authorisation and registration, are already supported by it and measures which increase transparency to assist the authorities in the understanding of systemic risk issues are to be welcomed.
 
'We want to work with the Commission, EU governments and the European Parliament on this. We are not opposed to the directive per se, we just want the final directive to be practical and realistic,' adds Baker.