Fri, Apr 20, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Some key EU markets 'gold-plating' AIFMD - AIMA/EY survey

Friday, October 11, 2013
Opalesque Industry Update - Some key European markets are "gold-plating" the marketing requirements for legacy national private placement regimes (NPPR) over and above those required by the Alternative Investment Fund Managers Directive (AIFMD), according to 'AIFMD: The Road to Implementation', a joint survey by the Alternative Investment Management Association (AIMA), the global hedge fund industry association, and EY.

The survey sought to develop an understanding of EU member states' actual readiness to implement AIFMD. While several countries including the UK, Ireland, Sweden and Luxembourg are requiring non-domestic AIFMs to comply only with the minimum rules laid down by the AIFMD when using private placement in their countries, some countries have chosen to impose additional requirements.

France has elected to impose such significant additional requirements on non-domestic AIFMs seeking to market under France's private placement regime that they will find it extremely difficult to market AIFs in France. Germany is one of a small number of EU countries that will require non-EU AIFMs of non-EU AIFs to appoint an entity to carry out the so called "depositary-lite" duties of cash monitoring, safekeeping of assets and oversight and verification, a requirement under the Directive applied only to EU AIFMs marketing non-EU AIFs.

Jiri Krol, AIMA's Deputy CEO, Head of Government & Regulatory Affairs, said: "Investors in those jurisdictions that have gold-plated the minimum requirements set out in the Directive for the national private placement regimes will have a more restricted selection of funds to choose from compared to peers in other countries. However those Member States which sought the preservation of private placement regimes have provided transitional relief and refrained from imposing additional rules."

Other requirements across member states are not uniform. At least nine countries will require EU AIFMs marketing non-EU AIFs in their jurisdictions to engage a qualified auditor to perform statutory audits of each non-EU fund under the EU's Statutory Audits Directive, potentially increasing those funds' audit costs.

At least seven countries intend to allow AIFMs of EU AIFs to appoint a depositary in a country other than the country of the fund's domicile - an option which, if introduced more widely, could generate greater competition in the depositary sector. Benjamin Lucas, Director at EY, said: "Uncertainty and a lack of clarity have impacted the number of authorisations to date. However, the survey shows that, while managers may be hesitant, the commitment from member states to adopt AIFMD has actually been remarkably positive. AIFMD is taking root far quicker than other regulations have in the past.

"Almost all 'core' member states have transposed the Directive and the majority are allowing transitional relief. However, it is clear from some of the changes made to private placement regimes that the transition period is little more than short-term pain-relief. Regulators are keen to incentivise firms to get authorised as soon as possible and the recent clarification of reporting requirements from ESMA appears to have acted as a trigger event for managers who have been holding back until the last minute. In the past month there has been a significant increase in firms looking for support both through the authorisation process and beyond. The extent to which this will translate into actual authorised entities remains to be seen."

The survey, which was completed on 28 August 2013, builds on an initial set of findings that AIMA and EY released two days after the AIFMD began to take effect on 22 July. That initial report focused on transposition and transitional arrangements and showed mixed progress in terms of AIFMD implementation. It can be found here

km

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. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  2. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  3. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  4. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a

  5. Performance - Hedge funds suffer first back-to-back loss in two years, Netflix performance burns hedge fund short sellers, Macro hedge fund up 14.5% in first quarter sees dollar falling, Renaissance Technologies rebounds across hedge funds in March[more]

    Hedge funds suffer first back-to-back loss in two years From Bloomberg.com: Hedge Fund returns sank for a second straight month in March, the first back-to-back loss since the first two months of 2016, as trade wars, tech-sector woes and a Fed rate hike dragged down the S&P 500 from its