The text of the AIFM Directive (the "AIFMD" or the "Directive") adopted by the European Parliament on 11 November 2010 after 18 months of intensive discussions, sets down a new piece of regulation applicable to managers of alternative investment funds (AIFMs) and indirectly to alternative investment funds (AIFs).
Although the text of the Directive itself is very detailed, it provides that, in relation to a significant number of issues, the European Commission ("EC") and the European Securities and Markets Authority ("ESMA"), which replaced CESR with effect from 1 January 2011, must implement measures in the form of delegated acts, regulatory technical standards, implementing technical standards and other guidelines of a specific or general nature. Many of the items will have to be published by December 2011 and it is only those detailed provisions which will allow clarification of a number of aspects which currently remain uncertain.
The Directive was published on 1 July 2011 in the Official Journal of the European Union and entered into force on 21 July 2011. It provides that Member States must implement the Directive into national law by 22 July 2013.
Existing AIFM performing activities before 22 July 2013 benefit from a grandfathering period of one year and have to submit an application for authorisation by 22 July 2014 at the latest.
For Luxembourg, as one of the world's leading financial centres for investment funds, the implementation of the Directive will have a significant impact.
The text of the Directive provides for essential amendments to the current AIFM business models. However, many of the new requirements are familiar to professionals of the Luxembourg fund industry for being already part of their administrative, auditing, banking or counselling activities dedicated to a large extent to UCITS but also to Luxembourg regulated non-UCITS.
The discussions below aim at highlighting how some of the key requirements of the Directive can be addressed from a Luxembourg perspective.
The Directive has a truly all-encompassing scope (outside of that covered by the UCITS Directive). It is applicable to all EU managers who manage EU and non- EU funds. It also applies to all non-EU managers who manage EU funds and who market EU funds or non-EU funds in the European Union. This entails that the only situation which is out of scope is where there is no relationship with the EU such as the situation where a US manager manages a Cayman fund...