On April 29, 2009, the European Commission (EC) issued the Directive on Alternative Investment Fund Managers (AIFM Directive), which includes draft rules for more thorough regulation of a broad range of alternative investment managers, including hedge fund and private equity fund managers.  In doing so, it has initiated a new plan to resolve a long-running feud over the shape of Europe’s common regulation of the financial system.  Market participants who spoke to the Hedge Fund Law Report agreed that more burdensome regulations are likely to result, though the particulars are very much open for negotiation.  The negotiation process is all but certain to prove contentious.  This article reviews the points that the contending sides are likely to make as they work to implement or re-work AIFM Directive.