Hedge fund managers based in Asia face an array of threats from a compromise reached by European Union countries this week on proposed alternative investment regulations, according to experts in the region.

The industry won a reprieve from the most severe restrictions on the table, but managers may ultimately need to conform to a host of new guidelines in order to receive assets from European investors.

“The net effect still remains that these managers will have to follow EU law and an EU pay code in their respective local jurisdictions,” says Ho Han Ming, a partner with the law firm Clifford Chance and chairman of Singapore’s Alternative Investment Management Association. “Hence, multiple challenges continue to remain for the industry under the compromise agreement.”