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

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CP12/32 Implementation of the Alternative Investment Fund Managers Directive Annex X Prospectus Directive. 44 These requirements may be substantially new for AIFMs managing or marketing AIFs in the UK where the AIFs are unregulated CIS marketed exclusively to professional investors. Pre-sale disclosure requirements for UK-authorised funds 6.11 The Directive allows Member States to continue to impose national requirements on both AIFMs and AIFs where the AIF is marketed to retail investors. 45 As discussed in DP12/1 46 , the UK currently has national pre-sale investor disclosure rules for authorised AIFs (i.e. NURS and QIS). We do not intend to reconsider our current NURS and QIS disclosure requirements for the purpose of AIFMD implementation. They will continue to apply for the time being, in addition to the standard AIFMD requirements transposed in FUND 3.2. The NURS and QIS disclosure requirements are likely to fall within the scope of the EU Packaged Retail Investment Products (PRIPs) initiative 47 and we will need to reconsider them at a later date in light of developments in that area. This approach was supported by the majority of respondents to DP12/1. 6.12 We will address in CP2 how best to integrate the AIFMD requirements with the current rules about the contents of NURS and QIS prospectuses. Ongoing disclosure requirements 6.13 The Directive also requires AIFMs managing or marketing AIFs in the EEA to make certain ongoing disclosures to investors. These are transposed in our draft rules FUND 3.2.5R and 3.2.6R. AIFMs must periodically disclose information to investors regarding the liquidity and risk profile of the AIF. AIFMs that manage AIFs employing leverage must disclose, on a regular basis, any changes to the AIF’s maximum level of leverage, as well as any right of reuse of collateral or any guarantee granted under the leveraging arrangement. 6.14 We expect the Level 2 Regulation to provide further detail on the information to be disclosed and to set out the required frequency of disclosure. It is likely that in most cases the information will have to be disclosed as part of the AIF’s periodic reporting to investors and, at a minimum, along with the annual report. However, AIFMs should notify investors immediately if they activate any special liquidity arrangements permitted under the AIF’s constitution, such as gates, side pockets or suspensions of redemptions. 44 Directive 2003/71/EC. 45 Article 43 AIFMD. 46 Paragraphs 6.6-6.10 and questions 33 and 34 of DP12/1. 47 See the European Commission’s Proposal for a Regulation of the European Parliament and of the Council on key information documents for investment products, July 2012 http://ec.europa.eu/internal_market/finservices-retail/docs/investment_ products/20120703-proposal_en.pdf 42 Financial Services Authority November 2012
November 2012 Annual reporting CP12/32 Implementation of the Alternative Investment Fund Managers Directive 6.15 The annual reporting requirements in the Directive aim to ensure that investors and regulators are adequately informed about the financial and business affairs and risk profiles of the AIFs that an AIFM manages. 6.16 The proposed rules in FUND 3.3 set out the annual reporting requirements for UK-authorised AIFMs. 48 FUND 3.3 will also refer to the Level 2 Regulation, which will elaborate on these requirements. Under the draft Treasury regulations, non-EEA AIFMs will have to comply with similar requirements for each AIF they market in the UK. Providing an annual report 6.17 Our draft rules FUND 3.3.2R and 3.3.3R will require a full scope UK AIFM to make an annual report available for each UK and EEA AIF it manages and for each AIF it markets in the EEA. A non-EEA AIFM must make an annual report available for each AIF it markets in the UK. The report must be provided to investors on request, and must be made available to us. In the case of an EEA AIF, it must also be made available to the home state competent authority of that AIF. 6.18 The report must be provided for each financial year of the AIF and made available no later than six months following the end of the financial year, unless Member States impose a shorter period. 49 We intend to impose a shorter period on managers of non-UCITS retail schemes to maintain current requirements, which set a maximum of four months after financial year-end for publishing annual reports. 50 Content of the annual report 6.19 Our draft rules FUND 3.3.5R to 3.3.7R set out the minimum areas to be covered in the annual report. As well as the financial statements, they include a report on the AIF’s activities during the financial year, any material changes to previous disclosures made to investors, and information on the remuneration of the AIFM’s senior management and certain staff members. 6.20 We expect the Level 2 Regulation to provide a list of the minimum underlying items that should be included in the report where relevant, without seeking to harmonise the report’s contents completely. This approach recognises that different national and international accounting standards will apply to many AIFs. For example, non-EEA AIFs marketed in the UK (under Article 42 AIFMD) will not be subject to UK accounting rules and practices. 48 See the European Commission’s Proposal for a Regulation of the European Parliament and of the Council on key information documents for investment products, July 2012 http://ec.europa.eu/internal_market/finservices-retail/docs/investment_ products/20120703-proposal_en.pdf 49 Recital 48 AIFMD. 50 COLL 4.5.14R in the Handbook. Financial Services Authority 43
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Annex 2 November 2012 CP12/32 Imple
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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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Page 11 of 91 Appendix 1 (4) the id
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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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Page 23 of 91 Appendix 1 3.11.5 G T
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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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… Page 41 of 91 Appendix 1 (e) (i
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esources only at excessive cost. Pa
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Single Market Directive … Page 45
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[Note: paragraph 1(c) of Annex II o
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[Note: paragraph 1(r) of Annex II o
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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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