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

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
7
Operating requirements
for AIFMs
Annex X
7.1 This chapter outlines the requirements of the Directive that are applicable to the operation
of AIFMs. These include fair treatment of investors, conflicts of interest management,
organisational requirements, and risk, delegation, and remuneration requirements.
7.2 Respondents to DP12/1 stressed the need for consistency between the operational
requirements in the AIFMD and those in the UCITS and MiFID Directives. 57 The
organisational requirements in the AIFMD are designed to be broadly consistent with the
principles and requirements in the UCITS and MiFID Directives, while at the same time
seeking to take into account the particular characteristics of different types of AIF and the
diverse assets in which they may be invested.
7.3 Most of the organisational requirements in the Level 1 Directive are aligned with those in
the UCITS Directive, so we believe that there will not be many significant differences for
firms seeking dual authorisation. MiFID firms becoming AIFMs should already be
compliant with most of the general and resources requirements, the rules setting out
whether AIFMs might need to have a separate compliance or a permanent internal audit
function, and the rules on personal transactions.
7.4 MiFID firms are currently subject to the risk management requirements in SYSC 7.1, which
cover similar areas to the draft rules for AIFMD risk requirements. However, in some areas,
the AIFMD introduces new or more stringent requirements, such as setting maximum
leverage limits. MiFID firms becoming AIFMs will need to review their current leverage
policies, as well as their current risk-management arrangements more generally, against the
AIFMD requirements, to ensure that they are able to comply.
7.5 UCITS management companies are currently subject to the risk management requirements
in COLL 6.11 as well as to Handbook guidance in SYSC 7.1. Where AIFMD introduces
differences, firms intending to seek dual authorisation will need to ensure that they still
57 Question 12 in DP12/1.
48 Financial Services Authority November 2012