Opalesque Industry Update - In addition to the fast approaching deadline for AIFMD, all fund managers must be well aware that next Monday, 21 July 2014, is the last possible date for application to the FCA for authorisation to manage an AIF under the transitional provisions. Less obvious is the fact that it is also the key date to notify the FCA if the AIFM needs to carry out insurance mediation in connection with the fund. Many real estate managers, and some others, need to carry on insurance mediation when arranging insurance for the assets of the fund.|
Generally fund managers authorised as AIFMs or UCITS managers do not need separate permissions to carry out additional regulated activities in connection with or for the purposes of the management of the relevant AIF or UCITS. As far as insurance mediation is concerned a notable exception to this general rule was introduced recently by the Alternative Investment Fund Managers Order 2014 (amended by the Alternative Investment Fund Managers (Amendment) Order 2014). With effect from 22 July 2014 fund managers wishing to carry out insurance mediation as part of their fund management activities will need to have that separately specified in their scope of permission.
In recognition of the late change a short form notification procedure has been introduced – but only for those who give notice to the FCA before 22 July 2014. After that date a full scale variation of permission application would be required.
This notification must specify the relevant regulated insurance mediation activities for which permission is required and must be received by the FCA before 22 July 2014.
Authorised AIFMs and UCITS managers who give this notice will automatically be treated as having been granted permission to carry out the relevant insurance mediation on the date their permission (to manage AIFs or UCITS) takes effect, or 22 July 2014, whichever is later. This is assuming that the FCA has not imposed a requirement on the firm to refrain from carrying out insurance mediation.
For firms whose applications for authorisation or variation of permission applications have not yet been determined, the notification will effectively add insurance mediation to the activities for which application is being made.
Subsequent to 22 July 2014, managers will need to apply to the FCA to include insurance mediation in their permissions in the normal way as with any other regulated activity.