Sat, Aug 2, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

AIMA responds to ESMA’s AIFMD consultation paper

Thursday, September 15, 2011

Andrew Baker
Opalesque Industry Update - The Alternative Investment Management Association (AIMA), the global hedge fund association, has responded to a consultation by the European Securities and Markets Authority (ESMA) on how the Alternative Investment Fund Managers Directive (AIFMD) should be implemented.

ESMA, which is responsible for advising the European Commission on the implementing measures for the AIFMD, sought feedback on a consultation paper it circulated in July.

AIMA said many of ESMA’s draft proposals were “measured”, but several major areas of concern remained, including proposals relating to depositaries, leverage, valuation, transparency and liquidity management. So-called third country (non-EU) issues are covered by a separate and on-going ESMA consultation exercise.

Where possible, AIMA has strived in its 111-page response to provide an economic impact assessment of the Directive as well as detailed legal analysis.

For example, an AIMA study into the potential impact on depositaries found that, under the most adverse scenario, the total cost to hedge funds of implementing the more draconian options proposed in the paper could be more than US$6 billion.

AIMA said that those costs inevitably would be passed on to hedge fund investors such as pension funds, charities, universities and insurers. The Directive could lead to such high costs because depositaries would sharply increase their fees to funds to compensate them for the strict liability they would be expected to absorb for any losses incurred by unaffiliated sub-custodians which the former cannot realistically control.

AIMA CEO Andrew Baker said: “We wish to congratulate ESMA on a job well done in difficult circumstances and to a tight timetable. We hope they finalise the advice in the independent and evidence-based spirit in which they produced this consultation document.

“However, there remain a number of areas that continue to cause us difficulty, most notably the proposals relating to depositaries. While some of the proposals made by ESMA in this area are undoubtedly welcome, we are concerned that some of the options on the table are so extreme that the eventual regime could end up being not only wholly unworkable but also potentially dangerous by greatly increasing systemic risk. We would urge ESMA to look again at these proposals and opt for the more practicable options they put forward.”

The AIMA response can be viewed on ESMA’s website here:Source

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Kyria Capital Management bets on women hedge fund managers[more]

    Bailey McCann, Opalesque New York: As hedge fund assets top $3 trillion, and long/short strategies get more crowded than ever, with every manager hunting for even the tiniest bit of alpha, a new firm has emerged that claims its own edge – women. A recent Rothstein Kass study showed women-owned a

  2. Opalesque Exclusive: Q2, H1 end positively for hedge fund performance[more]

    Bailey McCann, Opalesque New York: New hedge fund monitor data from Citi Prime Finance shows that overall, hedge funds ended the month of June and the first half of the year positively. Composite hedge fund performance, equal-weighted across funds, ranged from +0.93% to +1.73%. June-14 performa

  3. Many CTAs have become more short-volatility in the last five years[more]

    Benedicte Gravrand, Opalesque Geneva: Quantitative easing has reduced and then suppressed volatility for the last five years. So analysts at R.G. Niederhoffer Capital Management recently examined if there had been a tendency for CTAs and hedge funds to adjust their styles to become more 'shor

  4. Other Voices: Event driven strategy outlook: Broader focus required[more]

    This article was authored by Alex Gavrish, founder and CEO of Etalon Investment Research, and author of "Wall Street Back To Basics."

  5. Other Voices: Not so easy to replicate activist hedge funds and achieve similar performance[more]

    This article was authored by Alex Gavrish, founder and CEO of Etalon Investment Research, and author of "Wall Street Back To Basics." With the amount of activist investments on the rise during the last few years, more and more media at