As mentioned in Regulatory Roundup 60, by 22 July 2015 ESMA has to provide an opinion/advice on:
- The functioning of the EU AIFM passport (managing and marketing)
- The extension of the passport regime to non-EEA AIFMs; and
- The marketing of non-EEA AIFs by EEA AIFMs
Although ESMA did not make the deadline, it finally published its ‘Advice’ and ‘Opinion’ on 30 July.
The ‘Advice’ concerns the application of the AIFMD passport to non-EEA AIFMs and AIFs.
Rather than a blanket approach, ESMA has decided to opt for a country-by-country assessment of the possible extension of the AIFMD passport. The list of the 22 non-EEA countries to be assessed can be found in s32 of 2015/1236, although ESMA is only in a position to issue advice on: Hong Kong, Singapore, US, Guernsey, Jersey and Switzerland.
The assessments can be found in pages 17 to 52 of the paper, although basically it’s a thumbs-up to the application of the AIFMD passport to Guernsey, Jersey and Switzerland (but subject to the enactment of amendments to its Stock Exchanges and Securities Trading Act); a delay in the decision for Hong Kong, Singapore and the US.
The ‘Opinion’ concerns the functioning of the AIFMD passport and of the National Private Placement Regimes (NPPR).
Echoing some observations made elsewhere, ESMA comments that:
- There are divergent approaches with respect to the marketing rules (fees charged by competent authorities get a mention);
- The definition of what constitutes a ‘professional investor’; and
- Varying interpretations of what activities constitute ‘marketing’ and ‘material changes’.
Having made those observations there was insufficient evidence to suggest that the AIFMD EEA passport had raised major issues. As for NPPRs, ESMA sees merit in the preparation of another opinion after a longer period of implementation has passed in all Member States.
ESMA’s Opinion can be found in 2.2 (EEA Passport) and 2.3 (NPPR) of 2015/1235, although as each barely extends to half a page there is not really much more added than is captured in the above bullet points. What might be more interesting is the information in the responses received based upon first-hand experiences e.g. fees charged for the passport in Member States can vary between as much as €7,000 in Luxembourg and nothing in the UK, Ireland and Netherlands (s55 to s59). Another respondent had problems with the definition of a professional investor in Germany and France where the concept of ‘professional investors’ and ‘semi-professional investors’ exists (s71)
Both the ‘Advice’ and the ‘Opinion’ represent ESMA’s views; it will be down to the European Commission, Parliament and Council to consider them.