Pdf the draft aifm directive and the future of european. Alternative investment fund managers directive aifmd for annual reports of aifs introduction the alternative investment fund managers directive aifmd or directive 1 is european union eu legislation aimed at increasing investor protection and reducing systematic risk by creating a harmonised eu. Eu directive on alternative investment fund managers enters. The aifmdirective is a european union directive which is due to be transposed into european union member states national law by 20. An eu aifm can market a non eu aif to professional investors via the pan eu marketing passport, 2 years after transposition of the draft directive i. The alternative investment fund managers directive aifm directive has consumed more oxygen than any other eu measure proposed in response to the financial crisis and has consumed the bulk of the energy of both the recent swedish and current spanish presidencies. Directive 201161eu of the european parliament and of the.
Aug 01, 2019 european, legislation eu, eu directives, 2011 eu directives aifs, alternative investment fund managers directive aifmd. Aifm directive societe generale securities services. Unless an exception applies, the aifmd applies to the following managers. Impact of the proposed aifm directive cra international. Directive will create a european lockinlock out as non eu fund managers will be exposed to the same level of scrutiny as those domiciled in the region. Eu aifms which manage andor market one or more aifs irrespective of whether they are eu or non eu. Directive 201161 eu of the european parliament and of the council of 8 june 2011 on alternative investment fund managers and amending directives 200341ec and 200965ec and regulations ec no 10602009 and eu no 10952010 question answer shall an internally managed aif whose portfolio includes assets below the thresholds. Prior to the emir refit, emir has categorised any eu or noneu aif that is managed by an eu aifm authorised or registered under the aifmd as an fc. Similarly, non eu aifm marketing aif in the eu are. Alternative investment fund managers directive 2011.
If, notwithstanding the steps referred to in paragraph 3 being taken, the noncompliance continues, and the case is one that relates to an irish aifm managing an aif or a non eu aifm being an aifm whose member state of reference is the state managing an eu aif, the bank shall require that the aifm resign as aifm of the aif concerned and. Alternative investment fund managers directive sfama. Aifmd level 2 means commission delegated regulation eu no. Should the directive be amended to further take into. The aifmdirective in the context of national regulation mayer brown llp ist eine partnerschaft mit beschrankter haftung nach dem recht des staates illinois, u. Member state of reference of a non eu aifm pursuant to directive 201161 eu of the european parliament and of. Our report considers the impact of aifmd on each type of aif. Similar to the ucits directive for retail funds, the aifmd enables alternative investment funds aifs authorised in one member state to be sold across the eu under a marketing passport. Aifmd is supplemented by a delegated regulation aifmd regulation.
The directive s framework gives rise to a major change, particularly for the real estate funds industry which, to date, has been regulated relatively lightly see box background to the directive. The proposed aifm directive is designed to introduce an euwide regime for registration and supervision of the managers of alternative investment funds aifs. The directive provides that the msr is the eu member state where the aifm intends to develop effective marketing for most of its aifs. The aifm license will confer an eu wide management passport to aifm that will permit the management of aifs based in any eu member state, either directly or through a branch.
Eu aifs managed by the eu aifm and the management of eu aifs established in member states other than the home member state of the aifm. It is a framework level 1 directive which has been supplemented by technical delegated and implementing measures. The aifmd framework is made up of the following eu legislation. The aifm regime takes a one size fits all approach by encompassing aifms of all aifs which are not covered by the ucits directive. Chapter 3 requirements for alternative investment fund. Non eu aifms a non eu aifm managing a eu aif marketing an aif in the eu does currently not need to comply with most of the aifm directive requirements. The following summary briefly describes the regulatory framework envisaged by the commission proposal. European, legislation eu, eu directives, 2011 eu directives aifs, alternative investment fund managers directive aifmd. Implications for noneu managers law360, new york august 25, 2010 in may 2010 the european parliament and the council of the european union each approved its own version of a draft directive on alternative investment fund managers. Member states have until 22 july 20 to implement its provisions. Directive 201161 eu of the european parliament and of the council of 8 june 2011 on alternative investment fund managers and amending directives 200341ec and 200965ec and regulations ec no 10602009 and eu no 10952010. Nevertheless, fund managers now have enough information to analyse the impact of the aifm directive on their structures and businesses, and to take appropriate action in advance of the implementation deadline of july 22, 20. Non eu aifm which manages a noneu aif marketed outside the eu. Risk management under the alternative investment fund.
A closedended fund may be within the scope of both the aifmd and the prospectus directive. The european alternative investment fund managers directivea non eu fund managers perspective. A guide to passporting rules on marketing alternative. Managers directive directive 201161 eu and the commission delegated regulation eu no 23120. There is no authorization required in the case of asset managers that manage foreign. Investment manager determine your strategy identify which funds can make use of the transitional arrangements consider if distribution strategies need to be amended analyse the costs and benefits of the eu passport. European commission publishes aifmd, level 2, implementing. European union committee subcommittee a economic and financial affairs and international trade published a report on the proposed aifm directive on 10th february 2010 hl 48 200910 accompanied by a press release. Extensive implications for noneu aifms the aifmd applies not only to european union eu aifms, but also to those noneu aifms that are managing or marketing aifms in eu member states which have transposed the aifmd into national law.
Aifmd has been designed to ensure greater transparency within the european fund market and to protect investors. The alternative investment fund managers directive 201161 eu or aifmd for short is an eu law on the financial regulation of hedge funds, private equity, real estate funds, and other alternative investment fund managers aifms in the european union. Aifmd means directive 201161 eu of the european parliament and of the council of 8 june 2011 on alternative investment fund managers and amending directives 200341ec and 200965ec and regulations ec no 10602009 and eu no 10952010. The committee received a response to the report from the european commission on. The aifmd establishes an eu wide harmonised framework for monitoring and supervising risks posed by aifms and the aifs they manage, and for strengthening the internal market in alternative funds. The alternative investment fund managers directive aifmd introduces a new passport system for the marketing of alternative investment funds aifs in the eu and creates a legal framework operating at european level to monitor and supervise alternative investment fund managers aifms within a harmonised system for the first. It is this member state that will issue the aifms passport. On 22 july, the deadline passed for eu 1 member states to implement the alternative investment fund managers directive aifmd into local law. Member state of reference of a noneu aifm pursuant to directive. It seeks to regulate the previously lightly regulated investment fund sector, in particular hedge funds, private equity funds and real estate funds. Alternative investment fund managers aifm directive 201161 eu law details information about directive 201161 eu including date of entry into force and links to summary and consolidated version. The directive applies to the below categories of aifm regardless of the openclosed ended status of the alternative investment fund aif, the legal structure of the aif or the aifm.
The regulation, when it enters into force, will be directly applicable in all eu member states and will not require any transposition into memberstate law. Directive on alternative investment fund managers aifmd 1 m155192851 the aifmd directive 201161 eu must be implemented by eu member states by 22 july, 20. Alternative investment fund managers directive 2011 wikipedia. However, although eu aifm managing eu aif have had access to a european passport since july 201 for marketing eu aif to professional investors, this passport will only be available to non eu aifm and non eu aif from the end of 2015, at the earliest2. Any subscription by professional investors, within 18 months of the eu aifm having begun premarketing, to. The alternative investment fund managers directive aifmd puts in place a comprehensive framework for the regulation of alternative investment fund managers within europe. The extent of such preparations will vary depending on whether the manager is an eu aifm or a non eu aifm. The alternative investment fund managers directive provides an eu framework for the regulation and oversight of alternative investment fund managers aifms.
Our aifmd implementation planner will guide aima member firms through some of the key questions they will need to answer in order to determine whether and how they fall in scope of the directive as well as private a high level summary of the key legislation provisions of both the level 1 and level 2 texts. This directive also provides for the conditions subject to which authorised eu aifms are entitled to market noneu aifs to profes sional investors in the union and the conditions subject to which a noneu. Indeed, one of the more contentious aspects of the directive continues to be the onerous requirements and. Investment fund managers aifm directive 201161 eu the directive, which came into effect for existing aifm on 22 july 2014. Eu aifm managing an eu aif, the aifm should resign. Under article 23 of the directive, for each eu aif an eu aifm manages and for each aif either an eu aifm or a non eu aifm markets in the eu, aifms must make certain information available to investors. With aifmd taking effect, non eu alternative investment fund managers should be aware of a new regime governing their marketing of such funds into the eu the aifmds private placement overlay. Directive 201161eu of the european parliament and of the council of 8 june 2011 on alternative investment fund managers and amending directives. Aifmd applies to aifms established in the eu which manage one or more. For noneu aif managed by eu aifm, meps largely support m. In the event this non eu passport regime is indeed approved in the latter half of 2015, non eu aifms managing or marketing aifs in the eu will be required to apply for authorization and must comply with the requirements outlined in the directive.
The functional and hierarchical separation of the risk management function in accordance with paragraph 1 shall be ensured throughout the whole hierarchical structure of. Alternative investment fund managers directive aifmd six. Gauzes view that the depository should be domiciled in the european union, unless the third country concerned has signed cooperation and information exchange agreements and an agreement in relation to article. It introduces it introduces the regulation of eu domiciled alternative investment fund managers aifm s who manage one or more. The eu based aifm must comply with all the provisions of the draft directive, have cooperation arrangements in place, the non eu aif must not be established in a jurisdiction that is. The directive was adopted on 8 june 2011 as directive 201161 eu of the european parliament and of the council of 8 june 2011 on alternative investment fund managers and amending directives 200341ec and 200965ec and regulations ec no 10602009 and eu no 10952010 and published in the. Introduction relevant for all eu based fund managers and advisers, and also relevant in practice. It introduces the regulation of eu domiciled alternative investment fund managers aifms who manage one or more alternative investment funds aifs in the eu and aifms established outside the eu which manage one or. The choice of member state of reference is not a free choice however. What types of requirements are imposed by the aifmd on eu aifms. The alternative investment fund managers directive aifmd is a european union eu regulation that applies to hedge funds, private equity funds, and.
The host country competent authorities will not be able to impose any additional requirements on the aifm in respect of the areas covered by the directive. The aifmd directive 201161 eu must be implemented by eu member states by 22 july, 20. The directives are legislative acts that set out aims that all eu member states must. The aifm alternative investment fund manager directive has the objective of regulating the alternative investment fund managers that manage andor market these funds and not the funds themselves, considering the extreme heterogeneity of this type of fund. Questions and answers by the european commission on the. Impact of the proposed aifm directive across europe 0bexecutive summary october 2009 charles river associates page 4. Nov 18, 2010 if a non eu aifm, or a non eu aif marketed in the eu, would be subject, in its home country, to a requirement that conflicts with a provision of the aifm directive, the non eu aifm may be exempted. The european member states must implement the directive on alternative investment fund managers the aifmd, 1. In june 2011, the european commission proposed a new directive aifm directive.
Alternative investment fund managers aifm directive. Amendments clog eu aifm directive debate the political. Pdf on jan 1, 2010, phoebus athanassiou and others published the draft aifm directive and the future of european alternative investment fund regulation. Directive 201161eu of the european parliament and of council of 8 june 2011 on alternative investment fund managers. Directive 201161eu on alternative investment fund managers. The european commission adopted the longheralded alternative investment fund managers directive aifmd, level 2, implementing regulation the regulation on 19 december 2012. Frequently asked questions version 15, 27 september 2019. Aifmd regulates the activities of alternative investment fund managers aifms and their alternative investment funds aifs. European directive 201161 eu on alternative investment fund managers presentation. The survey asked how likely respondents preqin special report. The extensive requirements with which aifms must comply are. The aifmdirective in the context of national regulation.
Directive 201161 eu of the european parliament and of council of 8 june 2011 on alternative investment fund managers. The us manager must comply with all of the provisions of the aifmd. The alternative investment fund managers directive 201161eu or aifmd for short is an eu law on the financial regulation of hedge funds, private equity, real estate funds, and other alternative investment fund managers aifms in the european union. Directive 201161 eu was transposed into irish law under the european union alternative investment fund managers regulations 20 the aifm regulations, on 16 july 20. Alternative investment fund managers aifm directive aifmd.
The aifmd aims to provide for an internal market for managers of alternative investment funds aifms a harmonised and stringent regulatory and supervisory framework for. Bingham lawyers have been following the development of the aifmd and advising clients on its impact since the initial proposal for a directive was made in 2009. Eu directive on alternative investment fund managers. Directive 2011 61 eu on alternative investment fund managers aifmd must be implemented by eu member states by 22 july 20. The eu alternative investment fund managers directive directive 201161 eu or aifmd aims to create a harmonised regulatory and supervisory framework for the management and marketing of private equity, venture capital and other alternative investment funds aifs in the european economic area comprising eu and efta members.
The eu directive for managers of alternative investment funds alternative investment fund managers directive or aifmd was adopted by the eu parliament on 11 november 2010. The grandfathering should apply until 20189 but it has no access to the eu passport for distribution. Alternative investment fund managers directive and its impact on. Most recently it has been the subject of a well publicised telephone call between. Mayer brown llp is a limited liability partnership established under the laws of the state of illinois u. The aifm directive is a european union directive which is due to be transposed into european union member states national law by 20. The aifm directive aifm collective investment schemes. All alternative investment funds managers established in the european union, whether they manage eu or noneu aif, are subject. Alternative investment fund managers directive aifmd. Commission regulation eu no 23120 2, commission regulation eu no 44720. Directive on alternative investment fund managers implications for irish qifs overview directive 2011 61 eu on alternative investment fund managers the directive, which was agreed by the european parliament on 11 november, 2010 was finally adopted on 21 july, 2011. Eu after 22 july 20, when the aifmd comes into effect. The european parliament and the council of the european union, having regard to the treaty on the functioning of the european union, and in particular article 531 thereof, having regard to the proposal from the european commission, after transmission of. Guidelines on eea aif and eea aifm notification procedures.
Eu member states were required to transpose the aifmd into national law by 22 july 20. Internal aifm refers to a structure where the legal form of the aif permits an internal management and where the aifs governing body has chosen not to appoint an external aifm aifmd. The protracted negotiations leading to the final adoption of the aifmd centred on issues surrounding how these provisions might apply to non eu aifm or non eu aif ie, access to the eu market for non eu aifm and non eu aif. There are a number of selection criteria set out in the directive based primarily on the locations of the aifs. Apr 17, 2018 the alternative investment fund managers directive aifmd is a european union eu regulation that applies to hedge funds, private equity funds, and real estate funds.
Aifmds impact on noneu managers of noneu alternative. The alternative investment fund managers directive aifmd, which was due to be implemented across the european union eu by 22 july 20, aims to harmonise the regulation of alternative investment fund managers aifms who manage or distribute alternative investment funds aifs in the eu. The aifm directive and the commission delegated regulation eu no 23120 of 19 december 2012 supplementing directive 201161 eu of the european parliament and of the council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision aifmdcdr also take into. The directive requires all covered aifms to obtain authorisation, and make various disclosures as a condition of operation. Alternative investment fund managers directive aifmd meeting the challenge 5 1. The aifmd a regulatory directive with tax implications. It also includes new requirements for firms acting as a depositary for an aif.
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