It has been feared for a while now that the European Union's new proposals to regulate bankers' bonuses would end up snaring asset managers and hedge funds in its net too. But the detailed proposals unveiled by EU authorities yesterday contain a crucial concession for investment firms.

The new rules on bonuses, which will apply from January 2011, include stipulations that bankers' cash bonuses will be capped at 30% of the total bonus and 20% for particularly large bonuses. "Large parts" must be deferred for multiple years, and made subject to clawbacks if losses subsequently emerge.