New EU regulation in the hedge fund sector is set to be approved despite opposition from Britain and the United States.

A European Parliament committee vote Monday evening is expected to approve a proposal that will force hedge funds outside the European Union to agree to transparency standards in exchange for being able to invest within the 27-nation bloc. Tomorrow, EU finance ministers will vote on the tough new rules—pushed by Germany—that will require managers of hedge funds and private equity groups to submit to direct pan-EU supervision.

A majority of EU countries are on course to approve the measures, with only the UK and the Czech Republic opposing the new rules. Spain, which currently holds the EU’s rotating presidency, said last week that it would push ahead with the legislation, known as the Alternative Investment Fund Managers Directive, despite Britain’s opposition.

Then UK Prime Minister Gordon Brown said in March that the proposed new rules may threaten London’s preeminence in the financial services industry.

“France and Germany have decided to use majority voting in the council to outvote the UK,” said Simon Gleeson, a regulatory lawyer at Clifford Chance llp in London. “You generally don’t outvote member states on areas they have a particular interest in. If the finance ministers do decide to go ahead with it, then there’s not a thing the UK can do.”

Britain is Europe’s main hedge fund and private equity center, with an estimated 80 percent of Europe’s—and a quarter of the world’s—hedge funds based in London. The mayor of London, Boris Johnson, has previously commented that Europe’s plans to regulate hedge funds could “strangle” London as a financial center.

Britain “has been lobbying hard to water down the draft measures but has come up against stiff opposition from France and Germany,” reports Investment International. “The U.S. is backing Britain’s stance as it believes that the new rules are protectionist and would prevent U.S. hedge funds raising funds in Europe.”

EU lawmakers say that hedge funds are partly responsible for the global financial crisis and thus need closer monitoring. However, “Senior bankers say that the directive is less about preventing a repeat of the financial crisis and more an attack on Anglo-Saxon capitalism and the City of London,” reports the Telegraph.co.uk.

Hedge fund manager Paul Marshall, of Marshall Wace, said: “This is a UK industry, which is going to be regulated by Brussels.”

As the Trumpet reported in our November/December 2009 issue,

European bureaucrats see the global economic crisis as an opportunity. …They are seizing the chance not only to reform the financial sector, but also to reshape the Continent. One of their most stunning moves has been to use this crisis as a pretext for advancing a long-term pet project: stripping the once-great Britain of its national sovereignty and global power. …European leaders are about to deal the death blow to London’s status as a global financial capital. How? Through oppressive regulation.

We continue to see Europe move forward with this project.

For more on the system of global financial regulation that is destined to exert its control around the globe, read “Europe’s Plans Will Destroy London” and “Financial Regulation in Prophecy!”