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

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CP12/32 Implementation of the Alternative Investment Fund Managers Directive Annex X 1.18 Chapter 10 briefly explains some of the key issues relevant to the marketing of AIFs, which we will explain in more detail in CP2. 1.19 Each chapter outlines the following, where appropriate: • the Directive article(s) being transposed; • the new rules firms must comply with under AIFMD and any related guidance; • the policy intention and its expected effect on firms; • matters where we propose, or are required, to make a discretionary decision (in each case a CBA is provided in Annex 1); • where it is clear, any existing requirements of our rules that will be disapplied for AIFMs; • whether an issue is likely to be affected by the Level 2 Regulation or expected ESMA guidelines; and • where an issue is not covered in this paper but is planned to be included in CP2. Preparing for AIFMD 1.20 We currently expect that AIFMD will apply to a significant number of UK-based firms managing the assets of retail and professional investors. AIFMD also applies to the small number of firms authorised as depositaries. Non-EEA AIFMs will be affected if they are marketing AIFs under Articles 36 and 42 of the Directive (see Chapter 10). 1.21 Under the Financial Services Bill 2012 (the Bill), an AIFM will be subject to both conduct and prudential regulation by the FCA. This will also generally be the case for depositaries; however, systemically important depositaries such as major banks will be prudentially regulated by the PRA. 1.22 In this paper, we do not take into account proposals that the Treasury intends to make concerning options to apply differentiated regimes to certain smaller firms under Article 3 of the Directive. Depending on the outcome of the Treasury’s consultation, we expect to address this subject in CP2. 1.23 Firms that will be, or expect to be, subject to the full Directive requirements will have many issues to consider, not of all which we can address at this time because of the various external dependencies that we have explained. Despite this uncertainty, we aim to give helpful indicative messages in this paper to firms that may become AIFMs or provide services to AIFMs, while awaiting finalisation of other legislative elements. We think that publishing this paper now will allow affected firms to begin making choices about their structuring and to continue planning for compliance with the Level 1 requirements. It will 10 Financial Services Authority November 2012
November 2012 CP12/32 Implementation of the Alternative Investment Fund Managers Directive also help firms that might wish to act as an AIF depositary to make decisions about their service offering. 1.24 We encourage you to keep up-to-date with European and domestic developments on AIFMD policy and implementation by referring to our publications and those of the Treasury, the European Commission and ESMA. Fees 1.25 We propose to consult on our fee-raising arrangements for firms in scope of AIFMD in CP2. This is because the Treasury will be consulting on necessary changes to the Regulated Activities Order 7 (RAO) as part of its own AIFMD consultation. The regulated activities carried on by firms under AIFMD impact, to some extent, our fee-raising arrangements. So we will need to make some changes to fee blocks A7 and A9 8 , although this will not affect the fee arrangements in 2013-2014 for firms in those fee blocks as at 1 April 2013. Next steps 1.26 Please send us your responses to this paper by Friday 1 February 2013. This consultation period is slightly shorter than the three months we would normally aim to give stakeholders, because of the need to finalise our rules and guidance as early as possible before 22 July 2013. 1.27 We intend to publish CP2 in February 2013. The exact timing depends on several factors, including the further development of the Treasury’s regulations, the timing of any further consultation the Treasury expects to carry out, and the further progress of European work on AIFMD. CP2 will have an eight-week consultation period, rather than the usual three months because of the nearness to the July 2013 implementation deadline. We set out in Annex 6 a summary of the subjects that we expect to cover in CP2. 1.28 We intend to publish one Policy Statement, relating to both parts of our consultation, in June 2013. The exact timing, including the point at which the Board of the FCA will be able to make final rules and guidance, will depend on external factors, including when the Treasury regulations become law. We will consider how we might give feedback at an earlier date on key issues arising from the consultation, to help stakeholders prepare for implementation. We refer in Chapter 2 to transitional arrangements for firms. 7 The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544, as amended. 8 The fee block structure is set out in FEES 4 Annex 1 of the FSA Handbook: http://fsahandbook.info/FSA/html/handbook/FEES/4/Annex1 Financial Services Authority 11
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ALTERNATIVE INVESTMENT FUND MANAGER
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Annex A Making the Investment Funds
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3.2.5 R An AIFM must, for each AIF
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[Note: article 15(1) of AIFMD] this
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(1) a full scope UK AIFM of: (a) a
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experienced; Page 19 of 91 Appendix
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(Own funds requirement). [Note: art
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supplements the meaning of financia
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instruments remain in its custody;
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supplementing this section] 4. Comm
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Annex B Amendments to the Glossary
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collective portfolio management fir
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Page 37 of 91 Appendix 1 non-listed
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BIPRU 730k firm Page 39 of 91 Appen
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esources only at excessive cost. Pa
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Single Market Directive … Page 45
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Types of investment firm: BIPRU 50K
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The following text is new and is no
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TABLE 7.4 PART I A firm must calcul
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Note consistently in respect of any
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initial capital (see item 5) if the
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Form of qualifying subordinated loa
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Annex H Amendments to the Supervisi
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Descriptio n of data item Annual re
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… Data item SUP 16.12.12R, unless
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indicated otherwise. Data item Firm
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client assets … Page 87 of 91 App
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… Data item SUP 16.12.23R, unless
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FSA066 and FSA06 are added - see fo
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Liquid assets test 32 Liquid assets
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Professional negligence capital req
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is not listed, select ‘Other’.
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FSA067 Capital adequacy - supplemen
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PII capital requirement 5A This is
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External validations Validation Dat
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