EU agrees final form of new hedge fund rules

* New rules put hedge funds under watch of pan-EU agency

* EU-wide licence for foreign funds to begin in 2015

BRUSSELS, Oct 26 (Reuters) - The EU agreed on the final form of a set of rules on hedge funds and other alternative investment firms in talks on Tuesday between representatives of the European Parliament, member states and the executive Commission, the parliament said in a statement.

The rules do not go as far as some regulation hawks in the European Parliament had wanted, but should lead to greater oversight and transparency in the sector, chiefly by putting it under the eye of a pan-European watchdog.

The final version of the regulatory regime, which will go to a full vote in the legislature next month, differs only in minor details from an agreement struck last week between finance ministers from around the 27-state bloc.

Ministers reached that deal after France backed down on a demand to give the new markets watchdog responsibility for issuing EU licences for foreign funds to work across the EU.

In return, Britain agreed to delay the start of the licensing scheme for foreign-based funds until around 2015.

France hopes the watchdog will gain more powers and increase its 100-strong staff over time.

The law extends the range of information private equity and hedge funds must disclose, such as what products and on which markets they are trading. It also subjects them to summary bans on short-selling, a power slated for the new EU markets agency. (Editing by Rex Merrifield)