What Do Alternative Investment Managers Do?

The abbreviation for Alternative Investment Fund Managers Directive is AIFMD [Alternative Investment Fund Managers directive]. All non-collective investment fund manager directives within the EU that are not covered by the Transferable Securities Collective Investment Scheme Directive.

Alternative Investment Fund Manager Instruction

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The abbreviation for Alternative Investment Fund Managers Directive is AIFMD [Alternative Investment Fund Managers directive]. All non-collective investment fund manager directives within the EU that are not covered by the Transferable Securities Collective Investment Scheme Directive.

EU Alternative Investment Fund Manager Directive (referred to as "AIFMD" or "Directive"). The directive establishes uniform regulatory requirements for managers of alternative investment funds (AIF) in the European Union (AIFM). With a few exceptions, the directive covers all funds except UCITS funds.

The directive must be implemented in accordance with the "Level 2" regulations to be promulgated by the European Commission, and then national regulations must be modified accordingly. Alternative investment fund managers must comply with the directive from July 22, 2013, and apply for authorization under the directive before July 22, 2014. The promulgation of Level 2 regulations has been delayed for a long time and may not be promulgated until December 2012. The Association of Investment Companies (Association of Closed-end Fund Investment Companies) has urged that the implementation period be postponed, stating that it is currently probably impossible for fund companies to meet relevant regulations within a limited time. It is reported that the reason for these delays is that the parties have been in dispute over key terms, including the concept of a shell company (which cannot be an alternative investment fund manager), custody responsibilities, and cooperation arrangements with non-EU regulators (allow Non-EU alternative investment funds and alternative investment funds managed by managers of alternative investment funds in non-EU countries are sold in EU member states).

Each alternative investment fund needs to appoint the relevant alternative investment fund manager in time to make the necessary changes in accordance with the instructions. Alternative investment fund managers must be responsible for portfolio and risk management, and cannot be a shell company. According to Level 2 regulations, the institution making the investment management commission can be a shell company. In this case, its existing business model (for example, the business model for managing qualified investor plans and non-UCITS fund retail investment plans) will be invalidated. .

The trustee must be responsible for the custody of the assets of the alternative investment fund, and its contractual arrangements, annual reports, articles of association and prospectus must be updated accordingly in accordance with the instructions.

From July 22, 2013, the directive will become a license for the sale of EU alternative investment funds managed by EU alternative investment fund managers to professional investors throughout the EU, eliminating the need to comply with the existing private placement regulations of each country one by one. Until 2015, non-EU alternative investment funds and alternative investment funds managed by non-EU alternative investment fund managers were not able to obtain EU licenses and could only be sold by private placement. In this regard, the directive stipulates other requirements, and individual EU member states have even implemented stricter regulations. In 2018, private placement rules may end, after which only alternative investment funds with relevant permits can be sold in the EU.

Please note: There are still many variables in this directive, which will determine the specific impact on investment funds (except UCITS). We will collect information about the current instruction to further update this page. For the latest information and advice on this directive, please feel free to contact our experts.