AIFMD - Alternative Investment Fund Management Directive
19 December 2014
The AIFMD goes back to April 2009 when the European Commission proposed a Directive on Alternative Investment Fund Managers (AIFMs). The objective was to create a comprehensive regulatory and supervisory framework for AIFMs at a European level and to provide harmonised regulatory standards for all AIFMs within the scope of the Directive.
Generally, the Directive aims to:
- Ensure all AIFMs are subject to appropriate authorisation and registration requirements.
- Provide a framework to monitor macro-prudential risks through regular reporting obligations.
- Ensure proper monitoring and limitation of micro-prudential risks.
- Develop a European single market for Alternative Investment Funds
The final agreement on the framework Directive (Level I) was signed in November 2010 and the text entered into force on 21 July 2011. On 22 July 2013 the Directive was transposed and a 12 month transitional period began. As of 22 July 2014 we are now under the full requirements of the AIFMD regime.
AIFMD introduces a number of operational requirements for fund managers which will present challenges for authorisation as well as on-going governance and monitoring. The broad scope of the Directive will mean that a large number of firms that have not previously been subject to regulatory oversight will come under the scrutiny of the FCA. Among these will be private equity and real estate managers. A further challenge for these firms will be meeting operational requirements that might be treated differently across different sectors. For example, a traditional hedge fund will approach risk management in a very different way to a private equity manager. Similarly, the treatment of carried interest under the remuneration rules will pose a significant challenge to those same private equity firms.
Current Challenges - Initial And Ongoing Considerations For AIFMS:
There are a number of operational challenges that AIFMs face under the new regime, including remuneration, code staff, proportionality and disclosure.
Download our guidance on the key areas of focus for firms regarding the requirements of the Directive.
Scope Of The AIFMD: Am I Caught?
The scope of the Directive is broad and careful consideration should be given on its applicability. Read more.
Authorisation / Registration
Read more information regarding the authorisation and registration process.
AIFM Annual Reporting
Read more information regarding the requirements for annual reporting.