Hedge funds and asset managers will be caught by the EU-led crackdown on bankers' bonuses, it emerged last night.
According to the BBC, new limits imposed on bankers' windfalls, including capping the cash portion and staggering payments over a minimum of three years, will also hit senior executives at hedge funds and fund managers.
It says the new rules will place the pay of hedge fund managers in the City of London, where 80% of European funds are based, under regulation for the first time.
Experts say there is now a strong probability it will encourage some of them to relocate outside the EU, to financial centres such as Geneva in Switzerland.
Under a deal agreed with the European Parliament last night, bankers' bonuses will be subject to new limits from next year, although the rules do not limit the size of bonuses.
Bankers will receive no more than 30% of their bonus immediately and in cash, or 20% for larger bonuses.
The remaining bonus payments will be deferred for three to five years and half of the up-front bonus would have to be paid in shares or other securities linked to the bank's performance.
Additionally, large severance packages for departing executives will also be limited.
That bonus size will not be subject to a limit reflects the agreement reached by the G20 countries last year, which fell short of imposing caps on the amounts bankers could be paid in bonuses.
The limits will apply to all 27 EU member states, although similar rules are already in place in countries including the UK.
They represent the latest sign of a tightening of global regulation of the financial industry since the economic crisis began in 2008.
