CP12/32: Implementation of the Alternative ... - BVCA admin

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
flexible way, to the extent that this is consistent with the FCA’s statutory objectives, and
this paper explains how we intend to use the derogations in specific areas.
Annex X
1.5 Implementing AIFMD depends on the completion of a number of other areas of work being
carried on at the European level, which we explain below. The delay that has occurred in
completing this work affects what we are able to address in this paper. We are not yet in a
position to analyse all the potential issues affecting firms, or to bring forward draft rules
and guidance in every area.
1.6 However, we believe there is now sufficient certainty for us to consult on some matters. So,
in this paper, we propose to address:
• the prudential regime for all types of alternative investment fund manager
(AIFM), including capital requirements, risk of professional negligence, the liquid
assets requirement and reporting matters, 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.
1.7 The prudential regime for AIFMs and the regime for depositaries are the areas where we
have to make choices about the best way to implement the Directive. In transposing other
parts of the Directive by ‘copy-out’ 4 , we have generally avoided imposing any new
requirements on firms beyond those in the Directive. Under the Financial Services and
Markets Act 2000 (FSMA), we must undertake and consult on a cost benefit analysis (CBA)
of the proposed changes to the Handbook, which is in Annex 1 of this paper.
1.8 This paper gives feedback on some of the implementation questions we raised in DP12/1.
We received 78 responses to the DP from a diverse range of stakeholders, for which we are
grateful. This feedback has been helpful and we have taken it into account when developing
our implementation approach, in conjunction with the Treasury. As a result, we will not be
publishing a separate Feedback Statement to DP12/1.
The European dimension of AIFMD
1.9 A key element in implementing the Directive will be the adoption of a European
Commission regulation (‘the Level 2 Regulation’) specifying much of the detail with which
AIFMs, depositaries and others will have to comply. At the time of publication, the
Regulation had not been issued, so we are unable to describe its effects precisely here. We
have explained in a number of places what we expect it to say, based on the technical advice
4 A ‘copy-out’ approach to Directive implementation means following in national law the words of the Level 1 text as closely as possible.
8 Financial Services Authority November 2012