So they start by not frightening the political horses in Frace and Germany,
" The ECB supports the intention to provide a harmonised regulatory and supervisory framework for the activities of alternative investment fund managers
(AIFMs) in the European Union."
But after that it the says,
"The ECB sees a potential risk of regulatory arbitrage between alternative investment fund managers, insurance companies and credit institutions, among which the proposed directive does not create a level playing field,"
Or in other words, if the EU pushes ahead with the Directive then business will sod off to places where the legislation doesn't exist.
Amusingly though it does want to ensure that central banks are exempt.