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

CP12/32
Implementation of the Alternative Investment Fund Managers Directive
Transparency requirements
Annex 1 X
51. AIFMs will be required to provide or make available specified information to investors
and regulators. These disclosure requirements fall into three categories: prior disclosure
to investors, annual reporting to investors and reporting obligations to the FCA. 20
Disclosure requirements regarding liquidity management, use of leverage and risk
management are covered in the respective parts of this CBA.
52. AIFMs will have to disclose certain information to investors before they invest in the AIF
(or if any material changes have been made). Many firms will have to update the contents of
their information for investors. However, because no particular format of disclosure is
prescribed and firms will be able to carry on with their current business practice, we do not
expect the requirement to impose significant costs on most firms. The cost ranges that firms
identified in our survey are summarised below (Table 9).
53. AIFMs will also be required to report to the FCA regularly on each AIF under their
management. The frequency of reporting is based on a number of criteria such as the
AIFM’s assets in AIF portfolios, the size of particular AIFs, and the investment strategy
of the AIFM.
Table 9: Incremental costs to firms from disclosure to investors and reporting to FCA
Requirement
Disclosure to investors*:
Incremental costs
One-off Ongoing (annual)
– cost per AIF (£) £0 – £5,000 £0 – £4,000
– total costs (£) £0 – £60,000 £0 – £36,000
Reporting to FCA £0 – £74,000 £0 – £120,000
*Note that these costs do not include the incremental costs to annual reporting, which we consider to be of minimal significance.
Remuneration requirements
54. As described in Chapter 7 of this CP, the Directive also includes requirements for the
implementation of remuneration policies by AIFMs. These requirements are similar to those
applicable to credit institutions and MiFID investment firms under CRD3 and the CEBS
Guidelines on Remuneration Policies and Practices, which we implemented in the UK via
the Remuneration Code.
55. We assessed the costs of implementing the Remuneration Code in the UK in the CBA of
Consultation paper 10/19. 21 We believe that we can broadly read across these estimates to
the AIFMD requirements (see Table 10). It is also worth noting, that some future AIFMs
are already subject to the Remuneration Code, though the AIFMD remuneration
requirements will be stricter for the larger firms than those of the Remuneration Code.
20 Articles 22-24 AIFMD.
21 www.fsa.gov.uk/pubs/cp/cp10_19_cba.pdf
A1:14 Financial Services Authority November 2012