An expert panel of leading practitioners and regulators from Continental Europe, the UK and Jersey has given further confidence that the island’s strategy for engaging with the Alternative Fund Managers Directive (AIFMD) is proving effective and that Jersey’s growing funds industry is on track to meet the criteria set out in the Directive and to take advantage of potential opportunities.
Jersey Finance hosted a seminar last Wednesday (July 20) that provided industry and regulators the first opportunity to debate the contents of the recently published AIFMD level II draft proposals, in which the detailed rules for the Directive have been outlined for the first time.
Geoff Cook, chief executive, Jersey Finance Limited commented:
‘Jersey is fully committed to the funds market and to ensuring we meet the criteria for participation in the proposed new EU regime for funds. As part of that process, we were keen to hear first hand and as early as possible from leading regulators and practitioners for their initial assessment of the implications of the Draft II measures.
‘Practitioners agreed that there were significant operational implications for everyone in the industry seeking to do business in EU markets and a need to examine the fine detail of the 438 page document but there was also broad consensus that Jersey had the regulatory capabilities and resources to meet any compliance requirements.’
The outcome was also in line with the findings of a survey of European alternative asset advisers undertaken by PwC on behalf of Jersey Finance. Some 83% of those surveyed were confident Jersey would meet the criteria for ongoing access to EU institutional investors. The majority of respondents believe Jersey should prioritise efforts in ensuring ongoing investor access through the private placement regime and they also agreed with Jersey’s strategy which is to introduce an ‘opt in’ AIFMD fully compliant regime. This AIFMD regime should be in place in advance of the implementation of the AIFMD in 2013.
Geoff Cook added:
‘The industry is determined to remain a leading European centre for funds business and the findings of the survey and the broad conclusions from our seminar, are further positive pointers for the future. It’s appreciated by everyone I think, and reinforced at the seminar, that compliance with the Directive requires a significant commitment throughout the asset management marketplace, by both onshore and offshore providers, and we intend to be at the forefront of that process so that our clients have the certainty they need that Jersey will we continue to offer access to EU products when the Directive is in place.’
Brendan McMahon, Partner, PwC, Jersey, who was moderator of the panel debate, added:
‘The debate highlighted that if practitioners or trade bodies want to influence the final outcome, ESMA requires constructive solutions in any submissions that are made. From Jersey’s perspective it was agreed that we are well placed to take advantage of opportunities but there is still a need to better explain Jersey’s high standards of corporate governance and regulation more widely within the EU. However, alternative asset managers continue to locate here, a reflection of their confidence in the jurisdiction to provide the appropriate AIFMD response, while retaining flexibility. Managers whose primary source of institutional capital is outside Europe will not want to be constrained by AIFMD, and Jersey will continue to provide the appropriate investor safeguards through its existing regulatory regime, thus retaining its flexibility. An AIFMD compliant regime will also be put in place. A perfect choice of solutions for alternative asset managers.’
The consultation paper was published by the European Securities and Markets Authority (ESMA) on July 15 and those industry groups and practitioners that wish to comment on the contents have until September 13 to respond to ESMA. ESMA say they will make their final recommendations to the EU Commission by November 16, 2011.
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