Alternative Investment Fund Managers Directive

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Directive 2011/61/EU
European Union directive
Text with EEA relevance
Title Alternative Investment Fund Managers Directive
Made by European Parliament and Council of the European Union
Made under Art. 53
Journal reference L 174, 1.7.2011, p. 1–73
Date made 8 June 2011
Came into force 21 July 2011
Current legislation

The Alternative Investment Fund Managers Directive (AIFMD) is a European Union (EU) directive governing the regulation of alternative investment fund managers (AIFMs) operating in the EU. It was published in the Official Journal of the European Union on 1 July 2011 and came into force on 21 July 2011.[1] EU directives usually take effect in the individual member states only after transposition into national law.

The Directive regulates:

  • EU fund managers that manage alternative investment funds (essentially hedge funds and private equity funds) ("AIFs") (wherever they are based);
  • fund managers (wherever they are based) that manage AIFs established in the EU; and
  • fund managers (wherever they are based) that market the units or shares of an AIF in the EU.[2]

Hedge funds and private equity funds and their Investment Managers (AIFMs) have not been subject to the same rules to protect the investing public as mutual (including UCITS) and pension funds and their managers. In general, the lack of financial regulation is seen by some[citation needed] to have contributed to the severity of the global financial crisis. The Directive was aimed at redressing this perceived regulatory gap.

The Directive was approved by the European Parliament and Council of the European Union on 8 June 2011 and published in the EU Official Journal on 1 July 2011 (OJ L171). The Directive is following the Lamfalussy process and has so far been supplemented by three Level II Regulations:

The European Securities and Markets Authority has also issued a number of guidelines to national competent authorities including on key concepts of AIFMD[4] and remuneration.[5]

The Directive needed to be written into national statute books by 22 July 2013 and, subject to the transitional periods, be brought into effect from this date.[6] As of 1 October 2013, 16 EU Member States had not yet transposed the Directive including Belgium, Finland, Greece, Italy, Poland, Portugal and Spain.[7]


The AIFMD was prompted as part of a wider regulatory effort undertaken by G20 nations following the global market downturn of 2008.[8][9][10] Provisions of the AIFMD include increasing transparency by AIFMs[8][11][12][1] and assuring that national supervisors, the European Securities and Markets Authority (ESMA),[13][14] and the European Systemic Risk Board (ESRB) have the information they need to monitor financial systems in the EU.[14][15] The AIFMD also is intended to protect investors.[16]

The directive came into force on July 21, 2011.[1][17] On November 16, 2011, ESMA issued technical advice to the European Commission (EC) on possible implementation measures for the AIFMD.[18] On December 19, 2012, the EC added a series of new regulations to supplement the AIFMD text.[1][19] EU Member States were required to write the AIFMD into national law by no later than July 22, 2013.[1][20][21][22] As of July 2014, not every EU Member State had transposed the AIFMD into national law.[23] Some, but not all, Member States provided for a one-year transition period, beginning July 22, 2013, before AIFMs would become subject to the AIFMD requirements.[17][1]

Requirements under the AIFMD include authorisation of an AIFM with the AIFM’s home state regulator for AIFMs that have assets under management in AIFs above the thresholds of: (1) 100 million EUR, if the AIF uses leverage; or (2) 500 million EUR, if the AIF does not use leverage.[24] The AIFMD also includes capital obligations,[24] organizational and governance requirements,[24] and the regular disclosure of information to investors.[25][19] Further, the AIFMD's reporting regulations assert that each AIF should be named using a series of codes, including its national identification code, the Bank Identifier Code (BIC) and the Legal Entity Identifier code.[25][19] The AFIMD requires AIFMs to select only brokers and counterparties that are subject to regulatory supervision, that are financially sound, and that have the necessary organizational structure to provide services to the AIFM or the AIF.[19] Finally, all AIMs must submit quarterly, semi-annual, or annual reports to their respective Member State regulator with information about the AIFM and its AIFs as well as an annual report with information such as the fund's financial statements, activities, and information about the total amount of remuneration paid by the AIFM to its staff.[19]

Under the AIFMD, special requirements apply to AIFMs using leverage. AIFMs are required to disclose the extent of the leverage employed within their funds, and prove that leverage in any fund has been limited to a reasonable amount.[26] The scope of AIFMD requirements that apply to AIFMs are different, depending on whether the AIFM is engaged in portfolio or risk management activities within the EU or markets its funds (AIFs) to EU investors. Under the AIFMD, each fund can only have one AIFM, though the AIFM can delegate certain functions to other entities.[21] EU AIFMs became subject to all of the provisions of the AIFMD once it was implemented at the EU Member State level.[27] Authorised fund managers located within the EU are permitted to market their EU funds to professional investors in any EU member state under what the AIFMD calls a passport.[27]

The AIFMD outlines several changes in regards to the regulation of non-EU AIFMs, although non-EU AIFMs managing non-EU AIFs and not marketing them in the EU are not subject to AIFMD.[27][28] Non-EU AIFMs marketing AIFs within the EU will be required to comply with disclosure requirements to both investors and EU regulators. Non-EU AIFMs must provide an annual report for each AIF they market in the EU.[27] Beginning in 2015, non-EU AIFMs may acquire a passport to market units or shares in AIFs within the EU but will require authorisation within the EU.[27]

Annex IV reporting[edit]

The reporting requirements of the AIFMD apply to all AIFMs who manage or market alternative funds within the EU.[29] To fulfill the reporting requirements, AIFMs must file an Annex IV report within 30 days of the end of the applicable reporting period, which is determined by the amount of an AIFM's assets under management. Reporting periods range from quarterly to half-yearly to annually.[25] The Annex IV report is a government regulatory document comprising 41 questions, analyzing a fund's investment portfolios, exposures, leverage ratios, liquidity and risk analysis.[30][31]


Malta (27 June 2013)[edit]

On 27 June 2013 (the measures were released on 25 June 2013) Malta became the first EU Member State to complete the transposition of the requirements of the Directive into national law.[32] The Maltese legislator and the Malta Financial Services Authority transposed the requirements of the Directive by means of a series of regulations issued under the Investment Services Act (Cap. 370, Laws of Malta) and a number of new MFSA rulebooks.[33]

Luxembourg (12 July 2013)[edit]

In Luxembourg, the AIFM directive was transposed into national law on 12 July 2013.[34] According to the 2013 law an entity – in order to become an AIFM – will have to submit an application to, and obtain authorization from, the Commission de Surveillance du Secteur Financier (CSSF). The application must include information on the directors of the AIFM, its shareholders, and the alternative investment funds (AIF), which it intends to manage and demonstrate how the entity will comply with the requirements of the AIFM Law.[35]

France (27 July 2013)[edit]

The AIM directive was transposed into France's national law on 27 July 2013.[36]


According to a study conducted by Deloitte,[37] most of the UK-based asset managers think that the AIFM Directive could reduce the competiviteness of the EU's alternative investment funds industry because of the compliance the regulations impose on the industry. In addition, these managers from the hedge fund, private equity and real estate sectors believe that the directive will reduce the number of non-EU managers operating within the EU.[38]

See also[edit]


  1. ^ a b c d e f "Alternative Investment Fund Managers Directive (AIFMD)". Financial Conduct Authority. 12 November 2014. Retrieved 13 January 2015. 
  2. ^ Four months left to AIFMD: it is time to get off the fence. Retrieved on 14 June 2013.
  3. ^ European Commission Publishes AIFMD Level 2 Implementing Regulation. Retrieved on 14 June 2013.
  4. ^ ESMA publishes final guidelines on Key Concepts of AIFMD Retrieved on 14 June 2013.
  5. ^ ESMA publishes final guidelines on AIFM remuneration Retrieved on 14 June 2013.
  6. ^ Shore, Ben (19 October 2010). "EU finance ministers agree new hedge fund curbs". BBC News Business. Retrieved 18 February 2012. 
  7. ^ AIFMD Transposition across EU Member States - KPMG Retrieved on 12 December 2013.
  8. ^ a b Astrid B. Boening (2012). The EU as a Global Player. Fundación Univ. San Pablo. p. 36. Retrieved 20 April 2015. 
  9. ^ Monica Gagna (15 December 2014). "Industry grapples with regulatory changes". Financial Times Advisor. Retrieved 20 April 2015. 
  10. ^ G20/OECD High-Level Principles of Long Term Investing Financing by Institutional Investors (PDF) (Report). Organization for Economic Cooperation and Development. September 2013. 
  11. ^ "COMMISSION DELEGATED REGULATION (EU) supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision" (PDF). European Commission. 19 December 2012. Retrieved 20 April 2015. 
  12. ^ "Directive 2004/39/EC of the European Parliament and of the council". European Commission. 21 April 2004. Retrieved 16 April 2015. 
  13. ^ Ivy Schmerken (30 July 2014). "Hedge Funds Face Compliance Hurdles of AIFMD". Wallstreet and Tech. Retrieved 15 December 2014. 
  14. ^ a b Jonathan Boyd (1 October 2013). "ESMA clarifies final guidelines on reporting obligations under AIFMD". Investment Europe. Retrieved 20 April 2015. 
  15. ^ Niamh Moloney (2014). EU Securities and Financial Markets Regulation. Oxford University Press. Retrieved 20 April 2015. 
  16. ^ Dave Waller. "The long and winding road". Retrieved 15 December 2014. 
  17. ^ a b "UCITS V — an update". The Lawyer. 9 December 2014. Retrieved 16 December 2014. 
  18. ^ European Securities and Markets Authority (ESMA) (16 November 2011). ESMA's technical advice to the European Commission on possible implementing measures of the Alternative Investment Fund Managers Directive (PDF) (Report). Retrieved 17 December 2014. 
  19. ^ a b c d e The European Commission (19 December 2012). Regulations (Report). Official Journal of the European Union. Retrieved 17 December 2014. 
  20. ^ Jonathan Boyd (31 May 2013). "ESMA approves Guernsey AIFMD cooperation agreement". Investment Europe. Retrieved 19 December 2014. 
  21. ^ a b Tim Clipstone (27 June 2014). "The British Virgin Islands – AIFMD one year on". Hedgeweek. Retrieved 18 December 2014. 
  22. ^ "Half of managers yet to apply for AIFMD authorisation, survey finds". 14 July 2014. Retrieved 15 December 2014. 
  23. ^ AIFMDTransposition (PDF) (Report). KPMG. 22 July 2014. Retrieved 17 December 2014. 
  24. ^ a b c Neil Robson (24 October 2014). "AIFM Directive for US Private Fund Managers". The National Law Review. Retrieved 20 April 2015. 
  25. ^ a b c "Consultation paper: guidelines on reporting obligations under Article 3 and Article 4 of the AIFMD" (PDF). European Securities and Market Authority. 2013. Retrieved 13 January 2015. 
  26. ^ "Alternative Investment Fund Managers Directive: AIFMs managing leveraged AIFs" (PDF). Financial Services Commission. 2013. pp. 3–5. Retrieved 13 January 2015. 
  27. ^ a b c d e William Younge (30 July 2013). "AIFMD's Impact on Non-EU Managers of Non-EU Alternative Investment Funds". Mondaq Business Briefing. Retrieved 18 December 2014. 
  28. ^ "Directive 2011/61/EU of the European Parliament and of the Council". European Parliament. 8 June 2011. Retrieved 15 May 2015. 
  29. ^ "SEI introduces AIFMD Annex IV reporting solution". HedgeWeek. 12 September 2014. Retrieved 15 December 2014. 
  30. ^ Becca Lipman. "This is Why AIFMD Annex IV Reports Demand More Attention". Wallstreet & Technology. Retrieved 18 December 2014. 
  31. ^ CME Group (7 July 2014). "2014 Q2 Webinar Programme". COOConnect. Retrieved 19 December 2014. 
  32. ^ Malta publishes final AIFMD implementing measures: Malta is open for AIFMD business. Retrieved on 27 June 2013.
  33. ^ MFSA Statement on the AIFMD. Retrieved on 27 June 2013.
  34. ^ "Laws, regulations and other texts". CSSF. Retrieved 6 October 2014. 
  35. ^ "AIFMD". Luxembourg Fund Partners. Retrieved 6 October 2014. 
  36. ^ "La directive AIFM est en vigueur en France". AMF. 
  37. ^ Alternative Investment Fund Managers Directive (AIFMD). Retrieved on 14 August 2012.
  38. ^ Fund Managers Afraid of AIFM Directive. Retrieved on 14 August 2012.

External links[edit]