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

November 2012
Contextualising AIFMD
CP12/32
Implementation of the Alternative Investment Fund Managers Directive
2.6 AIFMD is part of a significant reform programme put forward by the EU legislature to
extend appropriate regulation and oversight in the financial services sector to all persons
and activities that might embed significant risks. The aims of AIFMD include:
• establishing a harmonised EU framework for monitoring and supervising the risks
that AIFMs could pose to financial stability, and to investors, counterparties and other
financial market participants;
• enhancing supervisory practices and convergence among EU competent authorities to
support timely and pre-emptive action to prevent market instability and the build-up of
systemic risk in the European financial system;
• improving investor protection by imposing new depositary standards and enhanced
transparency through new investor disclosure rules and mandatory reporting to
competent authorities; and
• fostering efficiency and cross-border competition by deregulating national barriers
and creating level playing fields through harmonised rules on an EU-wide passport
for full-scope EEA AIFMs to market and manage AIFs from 23 July 2013. 10
The European process and the legal framework of AIFMD
2.7 We explain the key concepts and legal instruments of European law relevant to AIFMD
in Annex 5. Readers may find it helpful to refer to this Annex to better understand the
content which follows.
2.8 We posed a number of questions in DP12/1 with the expectation that some of the
Directive’s implementing measures would be adopted using Level 2 Directives.
2.9 Since publication of DP12/1, the Commission has, however, decided that all the detailed
Level 2 implementing measures should be adopted using EU regulations. 11 These will be
directly applicable to firms and supervisory authorities in UK law, without requiring any
transposition by the UK Parliament, so they are not subject to FSA consultation. This
means that some of the possible discretions we described in DP12/1 will not be available.
2.10 For the Level 2 Regulation to come into force, it needs to be adopted and agreed by the
Commission, European Parliament and European Council. At the time of publication, this
process has not yet begun.
10 From 23 July 2013 there is no passport for non-EEA AIFMs. This will apply from 2015/16 if the Commission adopts a delegated act
for such a passport, based on a positive report by ESMA – see article 62 AIFMD. However, from 23 July 2013 non-EEA AIFMs may
continue to market AIFs in the national jurisdictions of Member States that have opted to permit national private placement. This is
discussed further in Chapter 10.
11 These are essentially the Level 2 Regulation and further expected regulations on the ‘Member State of Reference’ for the non-EEA
passport and on home/host State competent authority supervision).
Financial Services Authority 15