The rules for marketing private funds within the european union eu changed dramatically with the alternative investment fund managers directive, or aifmd. Risikomanagement bei sachwert kvgaif mazars deutschland. The aifm may also provide noncore services to clients i. With the deadline for aifmd compliance just passed last month, u.
Commission regulation eu no 23120 2, commission regulation eu no 44720. Having followed over 18 months of drafting and redrafting of proposals, the path leading to the final draft with the ongoing dialogue over differing approaches has been long and difficult. The level 2 regulations issued by the european commission and which form part of the implementing instruments for aifmd provides further clarification in relation to the conditions that may cause an aifm to be considered a letterbox entity pursuant to aifm. Directive 201161eu of the european parliament and of the council of 8 june 2011 on alternative investment fund managers and amending directives 200341ec and 200965ec and regulations ec no 10602009 and eu no 10952010. The alternative investment fund managers directive aifmd is a european union eu regulation that applies to hedge funds, private equity funds, and real estate funds.
The alternative investment fund managers directive 201161eu or aifmd for short is an. The aifmd will, when implemented in the eu member states, amongst others introduce a marketing passport the passport permitting the distribution of alternative investment funds aifs in any member state of the eu without additional authorisation or registration requirements and which is intended to replace, after a transitional period, the fragmented national private placement. Cssf regulation on risk management and conflicts of interest with respect to specialized investment funds. As from 2015, aifs managed by noneu aifm may be granted access to the eu passport, at which point in time the noneu aifm will not only need to fully comply with the directive as a eu aifm but will also be subject to additional specific third country provisions e. Overview of the uks small registered aifm regime sturgeon. The alternative investment fund managers directive aifmd is a european union eu regulation that applies to hedge funds, private equity funds, and. Aifm overview of the uks small registered aifm regime categories. May 30, 2016 within the ucits directive 201043eu p2 it is stated that the risk management process must satisfy article 51 of directive 200965ec. Oct 02, 2012 cssf regulation on risk management and conflicts of interest with respect to specialized investment funds. Fsi investment management newsletter 12014 current. Portfolio analysis and compliance tools need to provide a high level overview of the portfolio estate, and have the power and speed to act on potential breaches. Internally managed aif an aif where the legal form permits internal management and where the aifs governing body chooses not to appoint an external aifm.
Cssf regulation on risk management and conflicts of. Governance under aifmd pwc 5 conflicts of interest an aifm is required to take all reasonable steps to avoid conflicts of interest and, when they cannot be avoided, to identify, prevent, manage and monitor and, where applicable, disclose those conflicts. Authorisation and organisational requirements for aifm. Information about directive 201161eu including date of entry into force and links to summary and consolidated version. Alternative investment fund managers directive aifmd the financial crisis has demonstrated how important it is to have in place an effective and robust risk management organisation. The aifm must not delegate functions to the extent that it becomes a letterbox entity. This in turn should support timely and preemptive action to keep the european financial market stable and reduce risk. Aifm the alternative investment fund managers directive. Alternative investment fund managers directive 2011. Independent risk management constitutes one of the two core functions when it comes to alternative investment fund management. Eu and noneu aifm eu and noneu domiciled aifs service providers to these funds investors the directive applies to all aifm established in the eu which manage aifs, irrespective of whether the aif are. Aifmd is complex, potentially intrusive and burdensome legislation designed to regulate managers of alternative investment funds. Authorised aifm will be permitted to market aif to professional investors as defined in the markets in financial instruments directive in eu member states, subject to some notification, and will have the right to manage aif in other eu member states, again subject to notification requirements. The aifm must, however, perform either portfolio management or risk management itself since these tasks are considered to be the core functions of an aifm.
The alternative investment fund managers directive aifmd. It imposes licensing requirements on fund managers and a broad range of regulatory requirements, including capital requirements, conduct of business rules and restrictions on the ability to market nonretail funds to eu investors. The directive requires all covered aifms to obtain authorisation, and make various. In part this is to be achieved through specifying operating and business conditions as well as transparency standards for aifm. Scope while the main focus of the aifm directive is on managers of alternative investment funds, the directive will impact.
The drafting of the alternative investment fund managers directive illustrates this point. Aifmd reporting the alternative investment fund managers directive 201161eu aifmd is an eu law on the financial regulation of hedge funds, private equity, real estate funds, and other alternative investment fund managers aifms in the european union. He has a broad range of expertise on risk management and given that kinetic partners was one of the first firms to obtain a third party aifm license in luxembourg, picone is well versed in understanding the changing dynamics of risk management that hedge funds now face under the directive. This includes what is currently defined as a ucits firm. Alternative investment fund managers directive aifmd. March 2012 was the first step in the implementation of the aifm directive in. Aifm directive update 2014 21 report editor drew nicol t. Alternative investment fund managers directive aifmd hedge fund managers aifmd is likely to affect most hedge fund managers who manage funds or have investors in the european union if they are identified as the alternative investment fund manager aifm of a particular fund or funds. The opture aifm advanced version integrated fund risk managemnent builds on the opture aifm basic version and contains additional functions and features.
We provide comprehensive risk management monitoring software to cover all the regulatory requirements for ucits and aifmd directives, fca derivatives. The alternative investment fund managers directive aifmd is a regulatory framework for alternative investment fund managers aifms, including managers of hedge funds, private equity firms and investment trusts. Apr 17, 2018 the alternative investment fund managers directive aifmd is a european union eu regulation that applies to hedge funds, private equity funds, and real estate funds. Summary of alternative investment fund managers directive.
Fma richtlinie 20141 ifm independent fund management. The alternative investment fund managers directive2016. Industry news, press berwin leighton paisner llp and sturgeon ventures set out an overview of the regulatory regime for a small registered uk aifm under the alternative investment fund managers directive 201161eu. Firms should monitor our website for updates on aifmd. The aifmd aims to provide for an internal market for managers of alternative investment funds aifms a harmonised and stringent regulatory and supervisory framework for. The alternative investment fund managers directive 201161eu or aifmd for short is an eu law on the financial regulation of hedge funds, private equity, real estate funds, and other alternative investment fund managers aifms in the european union. The directive requires all covered aifms to obtain authorisation, and make various disclosures as a condition of operation. The implementation of this directive substantially increases the demands and obligations of fund managers. It is a framework level 1 directive which has been supplemented by technical delegated and implementing measures.
It introduces the regulation of eu domiciled alternative investment fund managers aifms who manage one or more alternative investment funds aifs in the eu and aifms established outside the eu which manage one or. Aifm risk management software, risk figures kvg kagb. It introduces the regulation of eu domiciled alternative investment fund managers aifms who manage one or more alternative investment funds aifs in the eu and aifms established outside. Aifmd annex iv reporting software solution matterhorn reporting. Fa solutions launches an aifmd reporting tool fa solutions. The aifmd aims to provide for an internal market for managers of alternative investment funds aifms a. The aifm directive is in principle applicable to all managers that manage or market one or more alternative investment funds, that is collective investment vehicles that do not qualify as undertakings for collective investment in transferable securities ucits. Alternative investment fund managers aifm directive 201161eu law details information about directive 201161eu on alternative investment fund managers including date of entry into force and links to summary and consolidated version. Aifmd, eu depositary markets, alternative investments, asset management, financial. The aifmd annex iv transparency reporting requirements represent a major challenge for alternative investment fund managers aifm. Other fundrelated tasks and services such as administration, marketing, evaluation and accounting services in the broadest sense may either be performed by the aifm or delegated.
The aifmd framework is made up of the following eu legislation. Summary of alternative investment fund managers directive aifmd. Stressing the importance of the tax implications of aifmd, the author notes the directive impacts on strategic and operational aspects of the aifm. Article 31 of the directive contains an exemption from authorisation for aifms in so far as they manage one or more aifs whose only investors are i the aifm, ii the parent undertakings of the aifm, iii the subsidiaries of the aifm, or iv other subsidiaries of those parent undertakings. In particular, an aifm must not solely or mechanistically rely on credit ratings issued by credit rating agencies, as defined in article 3 1 b of.
This is the primary directive on risk management for ucits funds. Therefore it is not the fund that is regulated by aifmd, only the manager of the fund the aifm. The provisions of this directive relating to the appointment and the tasks of a depositary should apply to all aifs managed by an aifm subject to this directive and therefore to all aif business models. Does an aif need to appoint a depositary in its home country. If an aifm provides these services on a crossborder basis either by the establishment of a branch or under the freedom to provide services, it is unclear whether the competent authority of the aifm home ms or the competent authority of the host ms shall be responsible for the supervision of. Directive on alternative investment fund managers aifmd 1 m155192851 the aifmd directive 201161eu must be implemented by eu member states by 22 july, 20. Aifmd risk management the final text of the alternative investment fund manager directive aifmd has been adopted on 11 november 2010 and. On 17 february 2014, the esma published an faq regarding the application of the aifm directive, which is to be successively supplemented. Aifmd and the mutation of risk management hedgeweek. Alternative investment fund managers directive aifmd statpro.
Aifmd reporting applies to alternative investment fund managers. Within the ucits directive 201043eu p2 it is stated that the risk management process must satisfy article 51 of directive 200965ec. However, under the directive the aifm will now have responsibility for the valuation. The aifm directive for aifm collective investment schemes. The aifm directive aifm collective investment schemes. Besides that, the netherlands authority for the financial markets afm handles a much more strict interpretation of regulation than they did in the past. In todays ever more complex business environment investment firms are required to implement sound risk principles and oversight mechanisms. Alternative investment fund managers directive aifm abbl.
The alternative investment fund managers directive 201161 aifmd is the main regulatory framework for nonretail fund managers operating in the european union. The aifmd directive 201161eu must be implemented by eu member states by 22 july, 20. We plan to publish an updated data reference guide middecember. Aifm risikomanagement software, aifm, kagb, kvg, fonds, opture. We offer comprehensive risk management services, either as appointed aifm or on a standalone basis as delegated risk management function. The aifmdirective is a european union directive which is due to be transposed into european union member states national law by 20. The eu directive for managers of alternative investment funds alternative investment fund managers directive or aifmd was adopted by the eu parliament on 11 november 2010. Fund marketing the european private equity and venture capital association evca published an analysis of the circumstances under which european and noneuropean private equity fund managers are able to market their funds under national placement rules across europe as of 22 july 20. A manager must base a meaningful amount of risk management activities in that office and consider the cost of compliance. The aifm directive has a broad scope, contrary to what the letter a from alternative might suggest. Aifm risikomanagement software, risikokennzahlen, kvg, kagb. Type of fund aifs are defined as any collective investment undertaking which. An aifm must implement adequate risk management systems to identify, measure, manage and monitor all risks relevant to each aif investment strategy and to which each aif is, or may be, exposed.
Following on from our earlier announcement, updated gabriel forms aif001 and aif002 are in force with effect from 27 november 2017. This article gives the background to this latest development. The aifm directive aims to enhance supervisory practices among competent authorities. A firm which is authorised under mifid or the banking consolidation directive cannot be the appointed aifm for an aif nor obtain authorisation under the aifmd. The alternative investment fund manager directive aifmd which had to be. Alternative investment fund managers directive 2011 wikipedia. The aifm delegates the performance of investment management functions to an extent that exceeds by a substantial margin the investment management functions performed by. The safeguards against conflicts of interest referred to in article 151 of directive 201161eu shall ensure, at least, that. The proposed directive on alternative investment fund managers aifm aims to introduce and harmonise a comprehensive and effective regulatory and supervisory framework for all aifm in the european union. Alternative investment fund managers aifm directive. It seeks to regulate the previously lightly regulated investment fund sector, in particular hedge funds, private equity funds and real estate funds.
Alternative investment fund managers directive aifmd deloitte. Jan 19, 2016 the directive also includes new requirements for firms that are acting as a depository for an alternative investment fund. The initial publication on the supplement addresses the firsttime application of the regulations for remuneration. Where an external aifm has been appointed to manage a particular aif, that aifm should not be deemed to be providing the investment service of portfolio management as defined in point 9 of article 41 of directive 200439ec, but, rather, collective portfolio management in accordance with this directive. The directive also includes new requirements for firms that are acting as a depository for an alternative investment fund. Chapter 3 requirements for alternative investment fund. Hedge funds and private equity funds rules for managers. According to this, the regulations are to be generally applied as soon as the kvg has. Was muss eine risikomanagementsoftware fur ein unternehmen leisten konnen. Aifm alternative investment fund managers directive. Aifm directive update december 2011 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. Aug 18, 2014 with the deadline for aifmd compliance just passed last month, u. Is it compliant with the aifmd if a luxembourg management company.