European hedge funds don’t need any more regulation, the European Commission said Thursday. The transparency of their holdings is also adequate, and any additional regulation could stifle their growth and their innovation, the Commission added.

“Regulatory safeguards exist at European level to ensure that all investors—including hedge funds and private equity firms—publicly disclose their acquisitions and refrain from any abusive behavior or insider trading,” the Commission said.

However, it is somewhat concerned over the impact that the hedge fund industry might have over Europe’s financial system, particularly as more investors pour into their through hedge funds-of-funds.

The European Commission made the statement in an attachment to a white paper calling for unified rules across the continent for investment advisors.

Hedge funds in Europe have $401 billion in assets, according to HedgeFund Intelligence.

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