UK/EUROPE - Leading UK pension lawyers believe a legal block can be placed against European Union proposals to place limits on risky investments.
The proposals - which have been put forward by Spain - would restrict the amount pension funds could hold in private equity, property, hedge funds and derivatives.
Hammond Suddards Edge pensions lawyer Tom Collinge explained: “From a technical point of view, this could still be halted in the Council of the European Union.
“If the UK government felt sufficiently strongly about it, this would be the point at which the proposal could be altered. When it gets to the Council of the European Union, they still have the ability in essence to veto the whole proposal.”
Under EU rules, the proposals will go through a co-decision procedure which involves the European Parliament and also the Council of the European Union which is made up of ministers from each EU country.
Collinge believes the government maybe influenced by the Myners report which suggested it would be better to have no directive on investments rather than a flawed directive.
He added: “Although I do not know what current government thinking is, it is interesting that the Myners report was so clear in its warning.”
Eversheds national head of pensions Robin Ellison saw the Spanish proposals coming unstuck in the European Court.
He explained that a number of cases are going through the European Court that will free-up distribution of pension products across Europe making the plans obsolete.
He said: “The British and the Dutch aren’t too bothered by this because they can see that in 18 months' time the European Court will liberalise pensions anyway without the need for a directive.”
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