In 2009, the European Commission introduced its Directive (the “Directive”) on Alternative Investment Fund Managers (“AIFM”), which would regulate investment funds within the European Union (“EU”). Although the Directive was introduced in 2009, it still has not passed, due in large part to disagreement over its restrictions on the ability of non-EU AIFMs to market their funds in the EU. This week, the Belgian presidency of the EU announced a proposal which would permit non-EU domiciled AIFMs to market their funds in one of two ways. The first option is for the non-EU AIFM to obtain a “passport” from one of the EU states which would allow the AIFM to market its funds in the EU. However, even with a passport, a non-EU AIFM would still have to comply with an extensive list of requirements. The second option is for the non-EU AIFM to market its funds by complying with each EU state’s private placement rules. Under the second option, the non-EU AIFM would have to comply with private placement rules for each of the different states in which it intends to market its funds. Proponents of the Directive believe that it will create cohesive regulation and increased transparency among AIFMs in EU states. Opponents of the Directive, including U.S. Treasury Secretary Timothy Geithner, argue that it is protectionist and potentially damaging to cross-border investment, since it creates extensive hurdles preventing non-EU AIFMs the ability to market funds in the EU.
 Proposal for a Directive of the European Parliament and of the Council on Alternative Investment Fund Managers and Amending Directives 2003/41/EC and 2009/65/EC (Revised Compromise Proposal 2010), available at http://register.consilium.europa.eu/pdf/en/10/st14/st14265-re01.en10.pdf.