AIFM Directive Update

Author:Mr Mark Browne
Profession:Mason Hayes & Curran

The European Securities and Markets Authority ("ESMA") issued its final report to the European Commission regarding the implementation of the Alternative Investment Fund Managers Directive ("AIFMD") on 16 November 2011. This article gives the background to this latest development regarding the AIFMD as well as an overview of the contents of the report itself. Introduction and Background The European Commission (the "Commission") first published a proposal for a directive regulating alternative investment fund managers ("AIFMs") at a European level in April 2009. Following numerous counter-proposals and amendments, a draft directive was ultimately agreed in October 2010. This directive was prepared as a principlebased framework document under the Lamfalussy procedure and accordingly, following its implementation, much of the fine detail remained to be determined, as "Level 2" measures. As a result the Commission requested the Committee of European Securities Regulators ("CESR"), which has now been replaced by ESMA, for advice on finalising the relevant details and ultimate implementation of the directive. CESR in turn requested stakeholders to make submissions on the open issues (the deadline for submissions being 14 January 2010). ESMA then produced two draft advisory reports as consultation papers. The first, issued in July 2011, addressed the first three sections of the Commission's request for input, which included general operating conditions to be applicable and exemptions from the scope of the AIFMD. The second, issued in August 2011, addressed relations with third countries (including regarding supervisory co-operation, marketing of non-EU Alternative Investment Funds ("AIFs"), delegation to service providers outside the EU and the appointment of non-EU service providers including depositaries. Responses to these consultation papers were invited until mid-September and open hearings were held by ESMA in Paris at which further submissions could be made and questions posed. Following all of this consultation the Final Report of ESMA issued on November 16 and is available here (the "Final Report"). Overview of the Final Report The Final Report comprises an executive summary, background information and then the body of the report, which is itself divided into four parts under the following headings (which address the specific format of the original request for guidance from the Commission): (i) General provisions, authorisation and operating conditions; (ii) Depositary; (iii)...

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