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

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
operator of a CIS (that is an AIF) is authorised to manage that AIF, the operator will no
longer need to hold a separate permission to operate the CIS – it will cease to be a
regulated activity as long as there is an authorised person acting as the AIFM.
Annex X
4.6 The activity of establishing and operating a CIS will be retained, but will only need to be
held where a firm operates a CIS that is neither an AIF nor a UCITS. The activity of sole
director of an OEIC will be abolished, as the activities of managing an AIF or a UCITS will
replace it entirely.
4.7 Managing an AIF will comprise all activities listed in Annex I of the Directive, if the AIFM
itself is appointed to perform them (whether or not it then delegates the performance to a
third party). The AIFM will always be responsible for the investment management
functions, but (where an AIF has an external AIFM) the governing body of the AIF may
appoint another person to perform some or all of the activities listed in paragraph 2 of
Annex I. If it does, that person will not need to be authorised to manage an AIF, but may
need to be authorised to perform another regulated activity (for example, if they effect the
issue and redemption of units or shares). 25
4.8 An AIFM will not need to hold separate permissions for other regulated activities (such as
managing investments) that it carries out ‘in connection with, or for the purposes of
managing the assets of AIFs and UCITS’. This covers core activities of the management of
the property of the AIF or UCITS scheme, such as making investment decisions and dealing
in securities or other assets, but not activities such as the management of individual
portfolios where they happen to be carried out by the same firm.
4.9 An AIFM that is responsible for some or all of the activities listed in Annex I paragraph 2
(for example, dealing with customer enquiries) will therefore be carrying on a regulated
activity when providing any of those services, even though the service would not be a
regulated activity if carried out by another person. However, categorising the activities of
an AIFM in this way provides clarity and certainty for AIFMs wishing to use the single
market passport to provide AIF management services in other Member States.
Authorisation of AIFMs
4.10 A full scope UK AIFM will need to be authorised under Part IV of FSMA by the FCA.
Firms that already hold a Part IV permission to carry on a regulated activity and consider
they should be authorised as an AIFM, may seek a variation of permission (VoP).
4.11 We are considering whether we might apply a ‘grandfathering’ process to VoPs for those
firms currently holding the permissions of operating a CIS or acting as sole director of an
OEIC, and will tell firms in due course what we intend to do. Some firms with the Part IV
permission of managing investments may decide they should also be authorised as AIFMs,
25 A closed-ended investment company that is internally managed may be authorised as its own AIFM, but it will not be an authorised
CIS under Part XVII of FSMA.
28 Financial Services Authority November 2012