The Alternative Investment Fund Managers Directive proposal saga continues to rumble on (the original draft Directive was issued at the end of April last year). After the ‘Swedish Proposal’ we now have the ‘Spanish Proposal’.
A quick recap on the original proposals:
- It would impact on all ‘Alternative Investment Funds’ which are basically all funds that are not harmonised under UCITS
- The Directive will capture all EU AIFMs with AUM above €100m (€500m where AIF with no leverage and a lock-in period of 5+ years
- The AIFM will have to report to its regulators on areas such as principal exposures; risk concentrations; and performance data
- Minimum capital for an AIFM of €125K (and higher if AUM exceed €250m)
- Generally only funds domiciled in Europe can be marketed by an EU authorised AIFM
- Offshore funds can be marketed but only under an EU approved passport (and would not be in force until 3 years after the rest of the Directive)
- Such third party funds will need to comply with stringent requirements on regulation, supervision and cooperation
- AIFs can be marketed to retail within same territory but no passporting rights to other Member States
- Each AIF will need an EU credit institution as a depositary of the scheme’s assets and cash
The Swedish presidency made various changes in a bid to reach a compromise, with the revised draft published in November. The general feeling was that this was an improvement, although they managed to slip in a completely new provision (Article 9a) on remuneration policies. The Spanish took over the presidency and issued its compromise draft this month which has received criticism from some areas, including the FSA.
It is reported that the European Parliament has in excess of 2,000 proposed amendments to review. Given this, and the continued opposition to some of the proposals (most notably from the UK), it may well be that we will see the first anniversary of the draft Directive’s publication before any agreement is reached.
For those brave enough, below are links to the original draft (April 2009); the Swedish redraft (November 2009); and the Spanish compromise (February 2010).