AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

Editorial: Addressing the implementation challenges of the Alternative Investment Fund Managers Directive

By Andrew Baker, CEO, AIMA

 

Q4 2012 edition


How the hedge fund industry is regulated is about to change profoundly. The Alternative Investment Fund Managers’ Directive (AIFMD) is (at the time of writing) about to be implemented. Some fund managers will need to comply by 22 July 2013, and that is a fairly daunting prospect, for this may well be the most extensive set of regulatory reforms in the industry’s history.

We are under no illusions as to the size of the task facing hedge fund firms, but AIMA is determined to assist the industry in meeting the various requirements.

You may have seen the recent announcement of our AIFMD Implementation Project. We will be devoting considerable resources to this important project over the coming weeks and months. It has three principal objectives: to provide guidance to the industry on complying with the Directive; to create a forum for discussion within the industry on the practicability of the new requirements; and to generate feedback on practical implementation issues that we can pass on to EU policymakers.

As part of the project, we are working in partnership with PwC, the corporate audit, tax and consulting firm, on the creation of an operational guide that will assist hedge fund firms in preparing for and tracking their compliance readiness as they approach the July transposition deadline. We also will publish a handbook on the Directive that will aim to provide guidance regarding the AIFMD’s requirements in areas of uncertainty. This handbook will appear later than the operational guide in order to take account of issues highlighted by the process of implementing the Directive at an EU member state level.  Alongside the AIFMD Implementation Project, we also intend to organise AIMA seminars on the AIFMD around the world.

I would like to thank the leaders of the working groups and all the AIMA member firms who are involved in the project for volunteering their time and expertise. Their contributions have been invaluable during the AIFMD negotiations and will be even more so during the implementation phase.

When the final text of the Level 2 regulations is agreed, it will remove considerable uncertainty and enable the global industry – for these measures have relevance globally – to make its final preparations.

The Directive has come a long way, and gone through many iterations, since its first draft was published back in spring 2009. At the time, we stressed that we supported many of the main measures, particularly those provisions relating to transparency, manager registration and the reporting of systemically relevant data. But we made it equally clear that there were a large number of provisions which the industry would find it difficult to implement. We engaged intensively with European and international policymakers on those measures, and I am pleased to say that considerable progress was made, and a significant amount of ground covered.

That said, there is still much in the Level 2 measures of the Directive that will be difficult for the industry to implement, and there will be a heavy compliance burden that the industry, and ultimately investors, will have to bear. But the impact will be far less severe than if something close to the original proposal had been passed.

There is much to do between now and July, and we intend to play a leading role on behalf of our members.

Finally, as 2012 draws to a close, I want to take this opportunity to thank all our members for their continued support and involvement throughout the year. I very much hope that we can continue to count on this support in 2013, in order that we will be able to continue our work on behalf of the global hedge fund industry.

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