Bloomberg reports that as many as 40 percent of the world’s hedge funds won’t have access to European Union investors if EU plans to oversee funds and private equity are passed in their current form, citing an official at Britain’s regulator.

Investors from the 27 member-state bloc won’t be able to access 40 percent of hedge funds and 35 percent of private equity firms under EU proposals because of so-called equivalence requirements, a Financial Services Authority official said, citing a report. The requirements test whether countries where funds are based have similar tax and legislation to the EU.