AIFMD Countdown – March 2013

Our latest monthly update on recent AIFMD developments. Some progress has been made but remains slow despite only a little over 120 days to go to the 22 July 2013 implementation date.

Since the last update, Denmark is the only new country to publish draft AIFMD legislation. Uncertainty remains around how the AIFMD will be implemented by the majority of EU member states and, in particular, what national private placement regimes will exist post AIFMD. Switzerland and Brazil are still the only countries to have agreed AIFMD co-operation agreements with ESMA.

In recent weeks, at least two firms have publicly announced they intend to act as depositary to private equity funds.  Discussions continue between depositaries and prime brokers for EU hedge funds and, to our knowledge, no firms have publicly announced their service offering. The UK’s final position relating to the so-called ‘depo-lite’ functions, which impact the large number of EU AIFM of non-EU AIF marketed to EU investors, remains unclear.

Developments over the last month include:

  • Twelve European countries, including the UK, collaborated in an unprecedented way to express concerns to the EU over the AIFMD implementation process
  • EU Council confirms it has no objection to the AIFMD ‘Level 2 Regulation’, paving the way for AIFMD to enter into force on 22 July 2013
  • FSA surveyed UK alternative investment management firms to understand the likely timing of applications to become an AIFM. In particular, any UK manager of EU AIF that wishes to become an AIFM by 22 July 2013, should respond. Responses due by 28 March 2013
  • HM Treasury published a second consultation paper and related regulations, covering common investment funds and common deposit funds, marketing to retail investors and application of the approved persons regime to internally managed funds. Responses due by 5 April 2013.

Coming up:

  • Delayed FSA Consultation Paper 2 (FSA CP2) expected imminently; to cover issues arising from level 2 regulation including FSA interpretation of letterbox/ delegation provisions
  • UK application of the Remuneration Guidelines now not expected to form part of FSA CP2, and to be subject to separate consultation
  • FSA expected to transition into Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) on 1 April 2013
  • HM Treasury Consultation Paper 3 to be published covering issues arising from the level 2 measures not addressed in previous consultation papers

The above blog was also published by COO Connect, click here.