Alerts

The European Savings Directive—Impact for Hedge Funds

July 1, 2005

The European Union Savings Directive comes into force on 1 July 2005. The Directive is intended to counter money-laundering and tax evasion by individuals receiving cross-border payments of savings income. To this end, the Directive requires the implementation of a Europe-wide regime under which Member States of the European Union and certain dependent or associated territories of such Member States (e.g., Jersey, Guernsey, the Netherlands Antilles and Cayman Islands) and a number of third countries (including Liechtenstein and Switzerland) (together, the “Signatory Jurisdictions”) will exchange information with each other about payments of interest made cross-border to (or certain residual entities) resident in the European Union. In the event, it now appears that most hedge funds are unlikely to be subject to the rigours of the Directive, although there are still some unanswered questions.