Directive on Alternative Investment Fund Managers - European Union Committee Contents


ABI        Association for British Insurers

AFG        Association Française de la Gestion financière

AFME      Association for Financial Markets in Europe

AIF        Alternative Investment Funds

AIFM        Alternative Investment Fund Mangers

AIMA        Alternative Investment Management Association

APCIMS  Association of Private Client Investment Managers and Stockbrokers

AREF        Association of Real Estate Funds

Arbitrage      See regulatory arbitrage

BBA        British Bankers' Association

BIS        Bank for International Settlements

BVCA        British Venture Capital Association

Capital  Cash used to generate income through investing in business or property

CBI        Confederation of British Industry

CCBE        Council of Bars and Law Societies of Europe

CEO        Chief Executive Officer

CLC        City of London Corporation

CRA        Charles River Associates

CRD        Capital Requirements Directive

Crowded trades  when a large number of hedge fund managers follow similar trading strategies and make similar trades

Depository  provides services to AIFMs including custody services and securities settlements and may also provide fund administration services

DG Competition  Directorate-General for Competition, European Commission

DG Markt  Directorate-General Internal Market and Services, European Commission

EC      European Community

ECB      European Central Bank

ECOFIN      Economic and Financial Affairs Council

ECON  Committee on Economic and Monetary Affairs of the European Parliament

EEA        European Economic Area

ESRB        European Systemic Risk Board

ESRC        European Systematic Risk Council

FEPS      Foundation for Progressive European Studies

FSA      Financial Services Authority

FSB      Financial Stability Board

FSF      Financial Stability Forum

Gauzès report  Report prepared by the rapporteur in the European Parliament on the Directive, published on 27 November 2009

GDP      Gross Domestic Product

Gearing      See Leverage

G20  Group of Twenty (G-20) Finance Ministers and Central Bank Governors

Hedge Funds      Privately owned investment companies

IOSCO      International Organisation of Securities Commissions

Leverage      The use of debt to supplement investment

Leverage ratio    The ratio of debt to equity applied by a fund

Liquidity      The ability to turn an asset readily into cash

LTCM      Long-Term Capital Management

Macro-prudential risks  Risks that affect the whole financial system

Macro-prudential    The analysis of wide economic trends and imbalances supervision      and the detection of risks that these trends may pose to          the financial system

MAD        Market Abuse Directive

MEP        Member of the European Parliament

Micro-prudential risks  Risks that affect an individual firm

Micro-prudential    The supervision of individual financial institutions supervision

MiFID      Markets in Financial Instruments Directive

Moral Hazard  The incentives for those involved in financial institutions benefiting from actual or expected government protection or insurance to behave less carefully (e.g. undertaking risky investments) just because of the existence of the protection or insurance

OECD  Organisation for Economic Cooperation and Development

PES        Party of the European Socialists

Prime brokers  The arms of investment banks and securities firms who provide services to hedge funds.

Private equity funds  Investment companies whose strategy is to seek ownership or large equity stakes in private companies

Property fund  A collective investment scheme with a portfolio consisting mainly of direct property but may also include other property related interests

Regulatory Arbitrage  Financial engineering which exploits the difference between economic and regulatory positions to avoid unwanted regulation. It can also refer to a financial institution structuring and locating itself to take advantage of the least burdensome regulator.

SEC        Securities and Exchange Commission

Short selling  Selling securities that have been borrowed from a third party with the intention of buying the identical assets back at a lower price at a later date to return to the lender.

Swedish Presidency    A document prepared by the Swedish Presidency issues note      highlighting the issues raised by the Directive

Swedish Presidency    A compromise proposal presented in November 2009 Compromise      in attempt to reach a general approach in the European         Council on the proposal.

Systemic risk  The inherent risk of collapse of an entire system, as opposed to risk carried by any one individual entity or component of a system.

UCITS  Undertakings for Collective Investment in Transferable Securities. UCITS are retail funds regulated at EU level which can be freely marketed across Europe to retail and other investors. Managers of pension funds, national central banks and non-pooled investments are excluded from the Directive's scope

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