On 1 October 2015, the European Securities in Markets Authority (“ESMA”) updated their Q&A on the application of the Alternative Investment Fund Managers Directive (“AIFMD”) in relation to depositaries.
AIFMD has built a comprehensive framework for the regulation of alternative investment fund managers (“AIFM”) throughout Europe. The extensive requirements with which AIFMs must comply are designed to ensure that these managers can manage AIFs on a cross-border basis and the AIFs that they manage can be sold on a cross-border basis. However, due to AIFMD’s scope and the diversity of markets there can often be difficulties among regulators on national levels in regards to implementation. The aim of ESMA’s Q&As is to promote common supervisory approaches and practices in the application of the AIFMD and its implementing measures. In addition, ESMA seeks to harmonise the regulatory environment in this respect and create a smoother working space for both regulators and firms. This is done by providing responses to questions posed by the general public and competent authorities in relation to the practical application of the AIFMD.
The Q&A is aimed at ensuring that in their supervisory activities, the competent authorities under AIFMD, are in convergence along the lines of the responses adopted by ESMA. However, the answers are also intended to help AIFMs by providing clarity as to the content of the AIFMD rules, rather than creating an extra layer of requirements.
The questions in the Q&A are, and will be, regularly reviewed by ESMA in order to identify whether there is a need for certain parts of the material, in certain areas, to be converted into ESMA guidelines.
The sections covered by the Q&A are as follows:
- notifications of AIFs;
- reporting to national competent authorities under Articles 3, 24 and 42;
- notification of AIFMs;
- MiFID services under Article 6(4) of the AIFMD;
- calculation of leverage;
- additional own funds; and
- scope of coverage of AIFMD.
AIFs and AIFMs should familiarise themselves with the answers provided by ESMA on each of these points in order to ensure that a consistent regulatory approach is followed throughout member states and that the necessary regulatory objectives are being met.
To view the full Q&A which was published by ESMA on 1 October 2015, please follow this link.
Should you require any further advice or information on the above, Cleveland & Co, your external in-house counsel, are here to help.