AIFMD Developments

On 29 April, HM Treasury published its Questions and Answers on the transposition of the Alternative Investment Fund Managers Directive (AIFMD). This suggested a number of provisions to the UK implementation of the AIFMD, which have been incorporated into the amended draft Alternative Investment Fund Managers Regulations 2013, ("AIFM Regs") published in May.

There will be a 1 year transitional period ("TP") for existing AIFM managers prior to 22nd July 2013. Those making use of the TP for the purposes of managing AIFs in the UK will not be subject to the need to use best efforts to comply with the AIFMD requirement and will only need to comply with the full requirements of the AIFMD once authorisation/permission to manage AIFs has been granted by the Financial Conduct Authority ("FCA").

In addition, under regulation 73 of the AIFM Regs, if a third country AIFM markets an AIF in an EEA State immediately before 22nd July 2013, it will not need to comply with implementing provisions other than those imposed by the AIFM Regs until the 22nd July 2014 or before this date if the AIFM notifies the FCA.

Consequently, third country managers will not need to comply with the reporting, disclosure and transparency requirements or the need for a co-operation agreement to be in place in the UK to market to UK investors (the AIFMD minimal requirements) until 22nd July 2014. They will only need to comply with the UK private placement regime to market AIFs until July 2014.

Regulatory partner, Jacqui Hatfield's comments are below:

The need to use best efforts to comply with the AIFMD requirement during the transitional period is unhelpful as it lacks clarity and provides uncertainty to the industry. The UK have thankfully clarified that this will not be applicable in the UK. It would be useful if all member states followed this lead.

The extension of the 1 year TP to third country managers will be a relief to third country managers wanting to actively market into the UK from the trigger date, who as a result of the requirement to have a co-operation agreement in place with each member state regulator...