When the European Commission announced back in March 2018, a proposal to amend the Alternative Investment Fund Managers Directive (AIFMD), in order to provide for a uniform regime for “pre-marketing” of alternative investment funds (AIFs) across Europe, there were many commentators that declared that “AIFMD II had finally arrived”.
Admittedly, one of the main concerns with the EU Market Passport was the different marketing requirements that exist between members states, and uncertainty over defining “marketing” and “pre-marketing” – Fund Managers had found it difficult to utilise the passport due to the differing approached from various national competent authorities. However, other than this, disappointingly, very few other issues with AIFMD were addressed.
AIFMD II it was not.
Under AIFMD Article 69, the EC is required to conduct a review of the Directive. The review was required to be conducted by 22nd July 2017 and provide analyse of:
- The experience of applying the AIFMD;
- Its impact on investors, AIFs or AIFMs, and in the EU and in third countries; and
- The degree to which AIFMD’s objectives have been achieved.
In December 2018, a report was prepared by KPMG which provided an assessment and evidence for the European Commission’s review of AIFMD pursuant to Article 69 AIFMD.
In June 2020, the European Commission (EC) published a further report in accordance with Article 69 on the application and scope of AIFMD. The report assessed whether the specific rules of the AIFMD are effective, efficient, coherent and relevant. The 11 page report however, was disappointing, and unfortunately raised as many questions, as it did answers.
Last week, ESMA published a lengthy letter to highlight some of the areas of AIFMD that could be improved. Additionally, the letter highlighted potential changes to the UCITS framework.
How many of ESMA’s recommendations will find their way into a meaningful AIMFD II? Below we highlight the 19 key areas ESMA has made recommendations for:
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