Key parts of the European Directive on Alternative Investment Fund Managers (AIFMD) will become effective on July 22, 2013. In particular, non-EEA managers who wish to market non-EEA funds to investors in Europe after July 22 will have to start complying with new rules and procedures under the AIFMD and relevant national implementing rules in each EEA country in which they wish to market.
Among the key recent developments relating to the implementation of the AIFMD for non-EEA managers and funds:
- ESMA (the European Securities and Markets Authority) recently entered into cooperation agreements with a number of key regulatory agencies in key jurisdictions, including the Securities and Exchange Commission in the U.S., as well as the relevant regulators in the Cayman Islands, the British Virgin Islands, Bermuda, Jersey, Guernsey, Australia, Canada, Hong Kong, Singapore and Switzerland. These agreements provide for the exchange of information among the relevant regulatory authorities, and are a necessary precondition that must occur before a manager from a particular non-EEA jurisdiction can market a fund from a particular non-EEA jurisdiction to EEA investors.
- Individual countries in the EEA must adopt legislation implementing the AIFMD by July 22, 2013. However, a number of countries (with the United Kingdom and Ireland being among the notable exceptions) have not yet taken the necessary action.
- Among other things, each EEA country is supposed to establish new filing and reporting procedures that must be followed by non-EEA managers and non-EEA funds after July 22 in each EEA country in which they market to investors. If a particular EEA country has not adopted new filing and reporting procedures by July 22, then it generally should be assumed that any existing national private placement rules in effect in that country will apply, unless otherwise indicated by the relevant regulatory authorities in the country. As the July 22 deadline approaches, non-EEA funds and managers likely will need to consult with local counsel in each relevant country in order to determine what filing and reporting procedures must be followed in order to market a fund to investors in that country as each country is likely to take different approaches to implementing the AIFMD.
- Two key countries, the United Kingdom and Germany, recently proposed transition periods that extend the AIFMD compliance deadline for non-EEA managers and non-EEA funds marketing to investors in those countries until July 22, 2014. EEA countries, such as the Netherlands and Sweden, also have proposed a transition period. Conditions often attach to the ability to use the transition period, such as having commenced marketing into the EEA or the relevant country prior to July 22, so the precise requirements in each country should be checked to ensure that a transition period is available to a non-EEA manager.
- Some countries, such as Finland and Luxembourg, currently are proposing not to offer extensions. Absent an extension in a particular EEA country, non-EEA funds and fund managers must be prepared to provide additional information on a range of topics to prospective investors. For funds that already have begun marketing efforts, this most likely would be done by way of either updated offering materials or some form of supplemental disclosure statement that includes the additional required information.
Published June 26, 2013.
