Fri, Mar 29, 2024
A A A
Welcome Guest
Free Trial RSS pod
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   |   
Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1