Thank you very much for your responses to the AIFMD questionnaire. This document is intended to provide some observations and feedback on the content of the questionnaires and also to bring to your attention some matters that you may need to consider further.
General comments
Firstly, it is clear from the responses that there are some licenceholders that do not undertake Class 3 activity (services to collective investment schemes) but which undertake Class 2 or Class 4 activity (investment business / corporate services) that are caught by the AIFMD’s scope because of its wider definition of fund (“AIF”).
It was also apparent that some licenceholders will be relying on the continuance of national private placement regimes with effect from July 2013, and a smaller number are interested in EU passporting and full AIFMD compliance in due course (which is anticipated to be available from 2015).
Licenceholders managing an EU AIF
Those licenceholders that will be managing an EU AIF will need to apply to the competent authority of the EU Member State of Reference for appropriate authorisation. The Commission expects relevant applications to be made in good time, and the licenceholder’s Relationship Manager at the Commission should be kept fully informed of these applications and their ongoing progress in relation to this.
Private placement - licenceholders managing non-EU AIFs or providing relevant services to a fund marketed into the EU
It is important that those licenceholders that will be:
• managing a non-EU AIF which is marketed into the EU; or
• undertaking (under a delegation) portfolio or risk management of an EU AIF or a non-EU AIF that is marketed into the EU,
under the private placement regime from 22 July 2013 (or earlier if your target EU Member States transpose the AIFMD earlier than this date), become fully aware of the AIFMD’s requirements in this area – known as the transparency and asset stripping requirements - and be compliant with them.
The requirements, which can be found at Articles 22 to 24 and Articles 26 to 30 of the AIFMD, include the provision of an annual report with specified content, disclosures to investors and reporting obligations to competent authorities. If these requirements will apply to structures which your business provides services to, please inform your Relationship Manager at the Commission of your plans for compliance with them.
Marketing into the EU
It was also apparent from responses, that despite providing portfolio or risk management functions to non-EU funds, many licenceholders felt that they were not within the reach of the AIFMD because the AIFs are not marketed into the EU.
This may be the case – but it is important to understand the definition of marketing for the purpose of the AIFMD. This can be found at Article 4(1)(x):
“marketing - means a direct or indirect offering or placement at the initiative of the AIFM or on behalf of the AIFM of units or shares of an AIF it manages to or with investors domiciled or with a registered office in the Union”
It can be seen that the marketing of the AIF does not have to be directly undertaken by the licenceholder providing the portfolio / risk management, and that the term includes the offering or placement of units or shares, by or on behalf of managers, in relation to the funds under their management. This could cover any solicitation to invest in the AIF at the initiative of the manager or on behalf of the fund manager, whether direct or indirect, for example, if it is promoted via intermediaries and distribution or placement agents, etc. in the EU. If this occurs the AIF may be classed as being marketed to EU investors and those firms will be within the AIFMD’s reach.
If an arrangement constitutes marketing, the transparency requirements mentioned above would therefore also apply, and you should contact your Relationship Manager to discuss your plans for compliance with those requirements.
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