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

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
6.6 The rules set out which information AIFMs must disclose to investors:
November 2012
• before they invest in an AIF;
• when material changes are made to the information; and
• on an ongoing basis.
Pre-sale disclosure requirements
6.7 The pre-sale disclosure requirements are set out in our draft rules FUND 3.2.2R and
3.2.3R. FUND 3.2.2R requires AIFMs to make a range of information available to
investors before they invest in an AIF, including information on an AIF’s:
• investment strategy and restrictions;
• use of leverage;
• liquidity risk management arrangements;
• fees and charges;
• valuation procedure;
• net asset value;
• procedure for the issue and sale of units or shares; and
• third-party service provider arrangements.
6.8 This information, and any material changes to it, should be made available to investors in
accordance with the constitution of the AIF. This means, at the very least, that the
information should be provided to investors on request. Depending on the provisions in the
constitution of the AIF, AIFMs may need (for example) to make the information available
on a website or proactively inform investors of material changes. Where the fund’s
constitution does not currently require the information to be made available at least on
request, it will need to be amended. In addition, a summary of any material changes to the
information must be set out in the AIF’s annual report. 43 The definition of a material
change is expected to be set out in the Level 2 Regulation.
6.9 FUND 3.2.3R also requires AIFMs to inform investors, before they invest in an AIF, of any
arrangement made by the AIF’s depositary to contractually discharge itself of liability. In
addition, the AIFM must inform investors without delay of any changes to the extent of the
depositary’s liability.
6.10 Many of these disclosure requirements should be familiar to the entities that will become
AIFMs managing AIFs marketed to retail investors in the UK, or AIFs subject to the
43 See Article 22(2)(d) AIFMD, transposed in FUND 3.3.4(4)R.
Financial Services Authority 41