Guidelines on key concepts of the AIFMD - Esma - Europa

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the AIF investments should not lead to the presumption that the relevant entity is not a collective investmentundertaking.24. Furthermore, ESMA considers that an ordinary company with general commercial purpose should notbe considered a collective investment undertaking. ESMA seeks stakeholders’ views on the key elementsfor the purposes of further defining the notion of an ordinary company with general commercialpurpose.25. Finally, ESMA clarifies that the determination of the characteristics mentioned in the previous paragraphsabove showing that an undertaking is a collective investment undertaking should be withoutprejudice to the fact that competent authorities and market participants should not consider that theabsence of all or any one of them conclusively demonstrates that the undertaking is not a collective investmentundertaking.Q5: Do you agree with the proposed guidance for identifying a ‘collective investmentundertaking’ for the purposes of the definition of AIF? If not, please explain why.Q6: Please provide qualitative and quantitative data on the costs and benefits thatthe proposed guidance for identifying a ‘collective investment undertaking’would imply.Q7: Do you agree with the analysis on the absence of any day-to-day investor discretionor control of the underlying assets in an AIF? If not, please explain why.Q8: Do you agree that an ordinary company with general commercial purposeshould not be considered a collective investment undertaking? If not, please explainwhy.Q9: Which are in your view the key characteristics defining an ordinary companywith general commercial purpose?3. Number of Investors26. Most respondents to the discussion paper fully supported ESMA’s view that, in order to determinewhether or not an undertaking raises capital from a number of investors, one should look at the rulesor instruments of incorporation of such undertaking and, if they do not restrict the raising of capitalfrom a single investor, consider that the undertaking raises capital from a number of investors. However,some of these respondents considered that the presence of a number of investors should remainde facto during the life of the fund and one should not only look at its rules or instruments of incorporation.A respondent also suggested to take into consideration not only any restriction provided in therules or instruments of incorporation, but also restrictions arising from legally binding documents orlegislative provisions.27. Given the support received from the respondents, ESMA decided to retain the approach proposed inthe discussion paper. As for the consideration to be given to the fact that the plurality of investors maycease to exist over time, ESMA believes that in order to ensure certainty and consistency in the applicationof the AIFMD, the element to be taken into consideration is the existence of a restriction toraise capital from a single investor. To that extent, ESMA saw merits in adding a reference to any restrictionswhich may arise from the national law applicable to the undertaking.10
28. Therefore, ESMA proposes to clarify that in order for an undertaking to be considered raising capitalfrom a number of investors, there should not be an enforceable obligation which restricts the sale ofunits/shares to a single investor. A collective investment undertaking which has a sole investor in factshould nonetheless be regarded as having a number of investors if the undertaking is not subject to anenforceable obligation under national law, its rules or instruments of incorporation, or any other provisionof binding legal effect, from having more than one investor, or if the sole investor invests fundswhich it has raised from more than one legal or natural person for the benefit of those persons as inthe case of nominee arrangements, feeder structures or fund of fund structures. The feeder fund or thefund of fund investing into the undertaking should be considered representing a number of underlyingbeneficial owners only in the case that they have themselves more than one investor.Q10: Do you agree with the proposed guidance for determining whether a ‘numberof investors’ exists for the purposes of the definition of AIF? If not, please explainwhy.Q11: Please provide qualitative and quantitative data on the costs and benefits thatthe proposed guidance for determining whether a ‘number of investors’ existswould imply.4. Defined investment policy29. Respondents to the discussion paper generally agreed with the guidance proposed by ESMA on theconcept of ‘defined investment policy’.30. ESMA considers that a defined investment policy should be understood as a policy about how thepooled capital in the undertaking is to be managed to generate a return for the investors from whom ithas been raised. Given the support received, ESMA saw merit in setting out factors that could, singlyor cumulatively, tend to indicate the existence of such a policy. These factors should contribute to ensuringa common understanding on how the existence of a defined investment policy should be determined.The determination of factors tending to indicate the existence of a defined investment policyshould be without prejudice to the fact that competent authorities and market participants should notconsider that the absence of all or any one of them conclusively demonstrates that no such policy exists.31. The indicative factors proposed in Section IX of the draft guidelines in Annex V broadly reflect theproposals set out in the discussion paper.32. Further to some comments received in the feedback from the consultation, ESMA considered it appropriateto replace the reference to a contractual relationship between the entity and the investorwhich binds the entity to follow the investment policy with a reference to an obligation (however arising)to investors, which is legally enforceable by them, to follow the investment policy, including allchanges to it (Section IX, paragraph 16(c) of the draft guidelines under Annex V);33. Furthermore, ESMA did not insert in the draft guidelines references to the following factors as indicatorsof the presence of a defined investment policy:(a) the investment policy is clearly set out and disclosed to investors;11
Page 1 and 2: Consultation paperGuideline
Page 3 and 4: Table of ContentsI. Executive Summa
Page 5: I. Executive SummaryReasons for pub
Page 9: 18. Furthermore, ESMA also confirms
Page 13 and 14: Annex I - Summary of questionsQ1: D
Page 15 and 16: Annex II - Cost-benefit analysis1.
Page 17 and 18: Belgium More than 100 funds No subs
Page 19 and 20: Benefits19. The expected benefits o
Page 21 and 22: tomatically imply that they should
Page 23 and 24: i. this respondent asked to confirm
Page 25 and 26: 16. An association of publicly list
Page 27 and 28: tion of “marketing” in Article
Page 29 and 30: 35. A respondent considered not nec
Page 31 and 32: stitutional investors) in order to
Page 33 and 34: clarifying how the group exemption
Page 35 and 36: 63. Furthermore, according to a cou
Page 37 and 38: 78. A banking association asked to
Page 39 and 40: 85. A real estate asset managers as
Page 41 and 42: Q7: Do you agree with the details p
Page 43 and 44: 116. A respondent agreed in broad t
Page 45 and 46: 133. A real estate asset managers a
Page 47 and 48: with respect to limited partnership
Page 49 and 50: Member States are allowed or even u
Page 51 and 52: IV. Compliance and reporting obliga
Page 53: (b) if a sole investor invests fund

Guidelines on key concepts of the AIFMD - Esma - Europa

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