30 April 2013 – Overview: AIFMD Transposition across EU Member States
Member states will have to transpose the AIFMD into national law by 22 July 2013.
This overview provides you with the State of Play (PDF, 570 KB) for each Member State.
23 April 2013 – Draft bill to implement AIFMD deposited in Austrian Parliament
The draft bill to implement the AIFM Directive has been deposited at the Austrian Parliament. The consultation period ends on the 8 May 2013.
16 April 2013 – The French regulator AMF published a Q&A for AIFMs
The Autorité des Marchés Financiers (AMF) has published a Q&A document (PDF, 760 KB) to help asset management companies to prepare for the implementation of the AIFMD. It is designed as a user guide for existing asset management companies and provides among other points a practical description of getting an authorisation under the AIFM Directive. Asset management companies now have the possibility to file an AIFM authorisation application with the AMF.
2 April 2013 – ESMA publishes draft regulatory technical standards on types of AIFMs
ESMA has published its draft regulatory technical standards (RTS) (PDF, 117KB) to determine types of AIFMs, where relevant in the application of the AIFMD.
The draft RTS distinguish AIFMs managing AIF of the open-ended type and AIFMs managing AIFs of the closed-ended type. The definitions set out in the RTS are needed in order to apply the rules on liquidity management, the valuation procedures and the transitional provisions of the AIFMD. The document will now go to the European Commission for final adoption.
27 March 2013 – European Commission publishes Q&A on AIFMD
The European Commission published on its website a Q&A section on the application of the AIFMD.
This section provides responses to several technical questions raised in relation to AIFMD, including the key topic of the transitional period for pre-existing AIFMs.
Further questions can also be submitted directly to the Commission online.
The Q&A section covers following topics:
- Cooperation between Member States' competent authorities
- Definition of an AIF
- Delegation
- Depositary
- Issues related to Article 37 AIFMD
- Issues related to master AIFs and feeder AIFs
- Issues related to private equity
- Marketing to retail investors
- MiFID firms and MiFID activities
- Own funds
- Passport issues
- Remuneration
- Reporting requirements
- Responsibility of Member States' competent authorities
- Scope and exemptions
- Transitional provisions
- Transposition
- Valuation
22 March 2013 – AIFMD Commission Delegated Regulation (“Level 2”) published in the Official Journal of the EU
The AIFMD Commission Delegated Regulation (EU) (PDF, 1.5 MB) No 231/2013 of 19 December 2012 was published in the Official Journal of the European Union on 22 March 2013. It will enter into force on 20 days after publication (11 April) and will apply from 22 July 2013. It supplements the AIFM Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision.
19 March 2013 – FSA issued second consultation paper
On 19 March 2013, the FSA issued a second consultation paper (CP13/9) (PDF, 2.3 MB) to cover all persistent issues set out in Annex 6 of the first consultation paper (November 2012). Responses are accepted until 10 May 2013.
13 March 2013 - HM Treasury published a second consultation on AIFMD transposition
HM Treasury published a second consultation (PDF, 240KB) to transpose the AIFMD. The transposition into UK law will require a further set of policy decisions which could not be consulted on in time for the first consultation paper. Draft regulations (PDF, 50 KB) accompany this consultation paper and these are intended to be combined with the draft regulations attached to the first consultation paper. Comments on the consultation can be made until 5 April 2013.
February 2013 – AIFMD: Re-shaping of the Future (Third Edition)
The AIFMD will have a significant re-shaping effect on the alternative investment fund industry in Europe and beyond.
In this Third Edition (PDF, 1.3 MB), we provide an overview of the AIFMD (Level I and Level II) legal and regulatory framework that will govern the alternative investment fund industry in the EU from July 2013 and re-shape the operations of managers and the alternative funds they manage.
11 February 2013 – ESMA: Final Report on Guidelines on Remuneration of AIFMs
AIFMs will be asked to introduce sound and prudent remuneration policies and organisational structures which avoid conflicts of interest that may lead to excessive risk taking. Key elements include:
- AIFs internal governance: that sound and prudent remuneration policies/ structures exist and are not circumvented
- Categories of staff covered, whose activities might have material impact on the AIFs risk profile (senior management, risk takers, control functions, and similar)
- Types of remuneration covering all forms and amounts of payment or benefit paid by the AIFM/AIF (Incl. carried interest, transfer of units), being divided into fixed (without linkage to performance) and variable (additional remuneration due to performance)
Guidelines (PDF, 900KB) will apply from 22 July 2013, subject to transitional provisions of the AIFMD.
Overview of cooperation arrangements with Third Countries
The co-operation arrangements under AIFMD shall be in place between EU and non-EU securities supervisors by July 2013. This will be done through a common Memorandum of Understanding (MoU), which will facilitate the cross-border supervision of those entities subject to AIFMD such as managers of alternative investment funds, depositaries and entities performing tasks under delegation by the manager.
ESMA is discussing with non-EU supervisors of entities subject to the requirements of the AIFMD about supervisory co-operation issues. The overview of the cooperation arrangements with Third Countries (PDF, 424KB) can be accessed here.
21 December – AIFMD Level 2 implementing measures in a nutshell
Deadline looming
The long awaited Delegated Act supplementing the Alternative Investment Fund Manager Directive (AIFMD) was released on 19 December 2012, providing an extensive set of detailed implementing measures and technical rules on a wide range of business areas.
Key highlights of the “Level 2 Implementing Measures”:
- The act takes the form of a regulation and does not need any national transposition but will be directly applicable in all EU Member States. However, European Parliament and Council have a period of 3 months, which may be extended to 6 months, to object to this act. If there are no objections, the Delegated Regulation will be applicable from 22 July 2013.
- The Regulation specifies the delegation rules of the AIFMD and, in particular, sets out the definition of a letter-box entity. This may have a significant impact on the business and/or operating models of some alternative fund managers.
- The duties of the depositary and the liability regime are defined in a strict manner. This may impact operating and business models of some depositaries and lead to different fee structures.
- The rules set out by the Commission diverge on some key points from ESMA’s technical advice from November 2011.
KPMG Luxembourg prepared a handy summary document of most important aspects of AIFMD level 2 implementing measures. This document can be consulted here.
In addition, our Managing Partner Georges Bock and Charles Muller, our Partner in charge of the European Center of Excellence for Investment Management, discuss the substantial strategic impacts on asset managers of the AIFMD “Level 2” implementing measures. Click here to view the video on KPMG TV.
19 December – ESMA clarifies rules for AIFs and their AIFM
The closing date for responses to these consultations is 1 February 2013. The Guidelines and Technical Standards will be finalised in the first half of 2013.
12 December - German government adopted draft law of AIFMD transposition
On 12 December 2012 the German government adopted a draft of the law to transpose the AIFMD into German law (Government Draft) including the new ‘Capital Investment Act’ (Kapitalanlagegesetzbuch - KAGB). This act is set to replace the existing German Investment Act (Investmentgesetz). The new regime would then cover UCITS and alternative investment funds as well as their managers. The upcoming KAGB would therefore create a single framework covering both rules for products and managers. As the next step, the Government Draft will have to be presented to the German parliament and go through the parliamentary process.
November 2012 – FSA publishes consultation paper on AIFMD
On 14 November 2012 the FSA issued the consultation paper CP12/32. Closing period is 1 February 2013. This is the first of two planned consultations on rules and guidance to transpose the requirements of the AIFM Directive into UK law. It follows on from the Discussion Paper (DP12/1) that was issued in January 2012.
The CP1 is addressing following issues:
-
The prudential regime for all types of AIFM, including capital requirements, risk of professional negligence, the liquid assets requirement and reporting requirements, as well as changes affecting UCITS management companies;
-
The regime for depositaries, including the eligibility of firms to be an AIF depositary, the capital requirements, and the requirement to act independently; and
-
The Level 1 Directive requirements on AIFMs, including organisational matters, duties in relation to management of funds, and transparency obligations towards investors and the FCA.
The FSA intends to issue the second part of the Consultation paper (CP2) in February 2013 to cover the outstanding topics, with a consultation period of only eight weeks.
November 2012 – AIFMD e*Books for iPad
AIFM Directive (English Version) and AIFMD – Luxembourg draft transposition law 6471 (French Version)
KPMG Luxembourg created two handy e*Book versions for iPad users which can be best viewed, searched and annotated in "iBooks" free application of your iPad.
The first e*Book features AIFM Directive 2011/61/EU entered into force on 21 July 2011. You can get your personal e*Book copy of AIFM Directive here (EPUB, 3.49 MB)
The second e*Book contains the Luxembourg Draft Law 6471 submitted to the Parliament for the implementation of the AIFMD into Luxembourg law.
You can download your personal e*Book version of Luxembourg Draft Law transposing AIFMD here (EPUB, 3.86 MB).
October 2012 – Irish Central Bank publishes consultation paper on AIFMD
On 30 October 2012 the Irish Central Bank published a consultation paper CP60 on the implementation of the AIFMD that will close on 11 December 2012. The Central Bank has drafted a revised framework for the regulation of non-UCITS investment funds, creating a single ‘AIF handbook’ to replace NU Notices and Guidance Notes. When the consultation process is complete the Central Bank intends to issue an interim AIF Handbook on which the industry can rely as a guide to the proposed post-AIFMD regulatory framework.
September 2012 – ESMA’s Open Hearing on guidelines on sound remuneration policies under the AIFMD
On Tuesday, 29 September, the European Securities and Markets Authority (ESMA) opens its doors for an “Open Hearing on guidelines on sound remuneration policies under the AIFMD”, located at Auditorium, level -1, ESMA, 103 Rue de Grenelle, 75007 Paris, 10.30-13.30..
Please follow this link to the official webpage, including the Consultation paper “Draft Guidelines on sound remuneration policies under the AIFMD”
This hearing is open to the public, free of charge. To participate you are required to register online: www.esma.europa.eu/hearing/59898/response.
August 2012 – Luxembourg draft AIFMD transposition law published
On Friday, 24 August, Luc Frieden, Minister of Finance, deposited in Parliament the draft law that will implement the AIFMD into national Luxembourg law. The document takes the Bill number 6471 - Bill-number-6471.pdf (2.6 MB) - and is also available under www.chd.lu.
In addition to the transposition into national law itself, the text also modifies a certain number of existing laws including the 2010 UCI law, the SIF and SICAR laws. The text then also intends to update existing legislation regarding the “société en commandite simple” and creates a new form of corporate structure called a “société en commandite spéciale” inspired by the Anglo-Saxon “limited partnership” concept. Finally, the text contains certain tax provisions, including the notion of “carried interest”.
The draft will now go to the “Conseil d’Etat” for its opinion and to the Parliament’s Finance and Budget Commission for its review. A final adoption could take place by the end of this year.
June 2012 – ESMA publishes consultation paper on remuneration
ESMA has published a consultation paper on the proposed guidelines on remuneration of AIFM. These funds will be asked to introduce sound and prudent remuneration policies and structures with the aim of increasing investor protection and avoiding conflicts of interest that may lead to excessive risk taking. The key elements of the guidelines include:
- Types of remuneration
- Who determines the remuneration policy
- How to identify the categories of staff covered
- Governance of remuneration
- General requirements on risk alignment
- Disclosure requirements
The consultation runs until 27 September and ESMA aims to publish a final report before the end of 2012, so that they will be in place in advance of the AIFMD transposition deadline of 22 July 2013.
May 2012 – Level II rules – Drafts of the Commission’s Delegated Regulation
Two draft versions of the Level II measures (Delegated Regulation) for the AIFMD have come into circulation. The purpose of this Delegated Regulation is to provide the implementing measures to some provisions in AIFMD. These draft have caused much debate across the industry due to the fact that the Commission’s drafts significantly differ from the ESMA guidelines on several key points such as :
- Third-country provisions
- Depositary liability
- Delegation
- Leverage
Surprising to some, this Level II act will take the form of a regulation. As such, the rules will become effective sooner whereas a directive allows a couple of years for transposition into national laws. A regulation also removes the flexibility of national regulators to implement the measures into local laws.
The Alternative Investment Management Association (AIMA) has published a paper - paper.pdf (275 KB) - to analyse the divergences between the European Commission’s draft and ESMA’s advice.
AIFMD Alert – 5 April 2012
Don’t miss the opportunity to register for our upcoming Business Dialogue Event for Private Equity and Real Estate Professionals:
“AIFMD level II measures - Understanding the European Commission’s position following ESMA’s technical advice”
The presentation is scheduled on June 27 (Wed) from 10.30 to 12.00. The registration is free but the number of places is limited.
24 March 2010
ESMA published responses on its consultation on key concepts of the Alternative Investment Fund Managers Directive (“AIFMD”) and types of AIFM published on 23 February 2012. The deadline for the response was 23 March 2012. The discussion paper can be consulted here - ESMA-consultation-paper.pdf (361 KB)
ESMA expects to issue a formal proposal for draft regulatory technical standards to determine types of AIFMs, where relevant in the application of the Directive in the second quarter 2012.
2 February 2012 - AIFMD - towards level II rules - FSA launched a new debate
Late January 2012, UK Financial Service Authority (“FSA”) published a discussion paper on implementation of the Alternative Investment Fund Managers Directive (“AIFMD”). This newly launched debate aims to gather views from “alternative” players on a number of somewhat controversial issues, such as depositaries, valuation, remuneration, regulatory capital, risk management and the special regime potentially applicable to smaller managers. The deadline for the response is March 2012. The discussion paper can be consulted here.
23 November 2011 - II Level measures published by ESMA
ESMA published its final technical advice (final-report.pdf, 2.4 MB) on the (“AIFMD”) on 16 November 2011. This 500-page, largely technical document, brings further clarity to many fundamental issues of the Directive.
During the annual ALFI European Alternative Investment Funds conference which took place on 22 and 23 November 2011, Luc Frieden – Mininster of Finance of the Grand Duchy of Luxembourg, sent a strong signal to the “alternative” community by emphasising that Luxembourg will be one of the first EU countries to implement the Directive as it was done for UCITS in the past.
KPMG Luxembourg prepared a 2-page overview (level2-ESMA-final-advice.pdf, 378 KB) that summarises major points of interest contained in ESMA’s final advice as well as key notes to the attention of Asset Managers, Depositories and Administrators.
September 2011
Earlier in September 2011, ESMA published responses to its second consultation paper (ESMA-consultation-paper.pdf, 151 KB) on possible implementing measures of the Alternative Investment Fund Managers Directive (“AIMFD”) in relation to supervision and third countries which were submitted by the industry on 23 September 2011. This draft technical advice provides a technical note on the topics relating to supervision and third countries, including marketing of third country alternative investment funds to EU investors, supervisory required for the delegation of certain functions to third country entities, and the appointment of third country depositaries.
The matters addressed in this second consultation paper are very important to the “alternative” community and affect not only alternative investment fund Managers (“AIFM”) established outside EU and those managing third country alternative investment funds (“AIF”) but also those decided to delegate.
On 26 September 2011, many stakeholders attended a public hearing at ESMA regarding these implementation measures.
Main topics of this hearing session were re-introduction of notion of equivalence and definition of the Member State of reference in cases where there are several Member States of reference.
Draft responses on an earlier Consultation Paper on ESMA's draft technical advices to the European Commission which deal with several implementing measures of the Alternative Investment Fund Managers Directive (AIFMD), such as authorisation, general operation conditions, depositaries, leverage and transparency have been also published.
Original consultation paper can be consulted here (ESMA-consultation-paper-part1.pdf, 1.9 MB).
What’s AIFMD?
The Alternative Investment Fund Managers Directive (“AIFMD”) aims at regulating the distributions / marketing of alternative investment funds and the organizations / operations of their managers. The Directive, approved in November 2010 by the European Parliament, has been adopted by the EU Council on 27 May 2011.
The directive has been published in the Official Journal on 1 July 2011 and entered into force on July 21, 2011.Member States will then have 2 years (until July 21, 2013) for the transposition into national law.
The press release (press-release.pdf, 87.7 KB) summarising the main key points of the directive can be consulted on the Council website.
Check out our AIFMD webpage in the Value for Funds section.
Where is the EU regulator in the process?
The European Commission has requested advice from ESMA on the content of implementing measures by 16 November 2011 and this advice was provided by ESMA on this date (final-report.pdf, 2.4 MB).
The European Commission is expected to finalise level II measures by November 2012 as latest.
KPMG in Luxembourg actively participates in AIFM working groups of Luxembourg Private Equity Association (“LPEA”), The Luxembourg Bankers' Association (“ABBL”), Commission de Surveillance du Secteur Financier (“CSSF”) and Association of the Luxembourg Fund Industry (“ALFI”) and participated in through those bodies in the responses to the ESMA discussion papers. As part of the Luxembourg delegation, we have also participated in various meetings with chairs of the task force, such as task force 2 on authorisation, delegation and organizational requirements.
Side effect of the directive:
On 16 June 2011, The European Commission, launched a consultation on new rules for venture capital funds which can be consulted here (consultation-paper-en.pdf, 80 KB).
This consultation document focuses on the creation of an Internal Market for venture capital and presents the core elements of a possible European framework in relation to the venture capital funds in the context of AIFM framework and a tailor-made system as a stand-alone alternative to AIFMD.
The consultation closed on 10 August 2011.
Even if the final approval of level II implementing measures will take place mid/end 2012, the final ESMA’s technical advice clearly brings more certainty on which decisions can be based and actions taken.
2012 is therefore the year when most of the strategic work should be carried out in order to determine the main impacts on the organizations and to consider any first mover advantage.
This is not only relevant for the managers but also for many service providers such as administrators and custodians.
Decisions of importance such as appointment and/or redomiciliation of the Managers or their funds and operational requirements’ alignment need time and careful analysis to assess all implications: whether it is operational, financial, tax or human.
New fund launches should anticipate the regulatory developments and this is equally important to assess the impacts on existing funds and investment vehicles.
We are part of the debate at many levels and we are happy to assist our clients in this first key phase of the regulation. We have the experience to assist you in thinking through the various aspects of the regulations and the impact on your organizations, cutting through complexity.
Our solution framework which looks like:
