The AIFM (Alternative Investment Fund Managers) Directive establishes an harmonised regulation framework for alternative funds distributed in the EU. In return, with the European passport, AIFMs are offered new opportunities to deploy their management services and distribute their Alternative Investment Funds (AIFs) in all EU Member States.
The AIFM Directive includes an harmonisation of the fund depositary function which is mandatory for each AIF.
The European Commission has adopted two regulations dated 12 July 2018, directly applicable from 1st April 2020. These regulations, published in the OJEU of 30th October 2018, amend the obligations of depositaries on the safekeeping of financial instruments held by alternative investment funds and UCITS:
- delegated regulation 2018/1618 amending delegated regulation 231/2013 (AIF),
- delegated regulation 2018/1619 amending delegated regulation 2016/438 (UCITS).
In particular, the following are specified:
- the regime for the segregation of assets in the sub-custody chain,
- the protection of assets in the event of the insolvency of the depositary or sub-custodian.
AIFMD establishes conditions of accreditation for investment management firms.
- Rules regarding their capital, delegation of management, organisation, risk management, funds' use of leverage, remuneration policies and practices, valuation by the investment manager itself or by an outside expert, reporting to the authorities and provision of information to investors.
- Depositary mandatory for each structure and obligation to send reporting to national competent authorities.
Challenges and opportunities for AIFMs:
- AIFM authorisation
- Delegation of functions (portfolio management and/or risk management)
- Depositary mandatory
- Remuneration policy
- Conflict of interest
- Independent valuation of assets
- Marketing passport facilitating cross-border distribution
- Reporting to National Competent Authorities
CACEIS helps fund managers comply with and take full advantage of the AIFM Directive
- AIF Structuring and Distribution
- Luxcellence & AIFMD Substance Requirements
- Risk Management Support for AIFMs/AIFs
- Middle and Back Office Activity Outsourcing for AIFs
- Depositary & Banking Services for AIFMs/AIFs
- AIFM Reports to National Competent Authorities
- On 30 July 2015, ESMA issued an advice on the application of the passport to non-EU AIFMs and AIFs in accordance with the rules set out in Art. 35 and Art. 37 to 41 of AIFMD
- The level 1 directive (available here) is supplemented by a level 2 regulation (available here)
22 July 2013
Any AIFM established after this date must be compliant with AIFMD
22 July 2014
Any AIFM established before July 2013 at this date must be compliant with AIFMD
ESMA to issue opinion on whether to extend passport to non-EU AIFM / non-EU AIF
Comission to start review of functioning of AIFM directive, and if appropriate, to propose changes
ESMA to report on functioning of passport and obstacles (if any) to ending National Private Placement Regime (NPPR)