AIFMD Report – A First Step Towards AIFMD 2

Although the AIFMD is still somewhat in its youth, this key asset management Directive contains a review clause that required the European Commission to start to review the application and scope of the directive in July 2017. A first important milestone in this review was reached in January 2019 when the Commission published a report exploring whether the AIFMD's objectives had been met. The report includes a number of key findings that give asset managers a taste of what might be to come in the second incarnation of this key legislation.

In the report, a number of AIFMD requirements were assessed against five major principles: effectiveness, efficiency, coherence, and relevance and EU added value. The European Commission engaged KPMG to prepare this report based on a survey covering 15 selected member states, with input from other jurisdictions, including non-EU countries.

Towards a less costly version of the AIFMD?

The overall findings indicate that the AIFMD has played a major role in helping to create an internal market for AIFs and a harmonized and stringent regulatory and supervisory framework for AIFMs. There was, though, an overriding concern that AIFMD implementation had been costly for both firms and regulators, with reportedly limited added value for investors. The large majority of institutional investors and their representative bodies said that the AIFMD had not influenced their decision to invest (or not) through AIFs, or to invest through EU/EEA AIFs rather than third country AIFs (or vice versa).

Exploring opportunities for improvement

Respondents to the survey identified a small number of areas where clarification or amendments would be beneficial, including:

The EU marketing passport. The regime suffers from different approaches by national regulators. In relation to non-EU AIFs and AIFMs, developments vary markedly from one Member State to another. Large volumes of data are submitted by AIFMs to NCAs under the AIFMD reporting requirements, but not all the data may be essential, some may be insufficient and some are duplicative. There are also overlapping reporting obligations under other EU legislation. The binary choice in the valuation rules between internal or external valuation, and the differing national...