The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

NAPF, IMA and AIMA Letter to MEPs on AIFM Directive

14 May 2010

We are writing to you on behalf of the Investment Management Association (IMA), the National Association of Pension Funds (NAPF) and the Alternative Investment Management Association (AIMA) regarding the upcoming vote in the Economic and Monetary Affairs committee on the draft report on the AIFM proposal. We appeal to you to support a pragmatic and workable solution on non-EU alternative investment funds and fund managers (the so-called ‘third country’ issue.)

Compromise amendment “N” (on Articles 35, 35a and 39) is, we fear, unworkable. In practice, it will not provide access for non-EU funds and fund managers, but will instead ban European investors from investing overseas. It will reduce choice and drive down returns for pension funds and other investors, as they will no longer be able to select their investments from among the best available products globally. This will undermine Europe’s competitiveness. There is a real risk that it would provoke retaliatory action in non-EU jurisdictions, which would damage the European financial services industry and the whole European economy.

There is no contradiction between setting criteria for some funds and fund managers to avail themselves of a ‘passport’ for cross-border marketing and maintaining Member State discretion on which non-EU funds may be marketed to qualified investors. In fact, this approach has already been supported by the Legal Affairs committee in its Opinion on the proposal and is supported by the European Council. It is the only pragmatic and workable solution on the third country issue.

We encourage Members to vote against Compromise Amendment “N”, or at least abstain from the vote on this amendment. Instead, we recommend voting in favour of Amendments 1454 (submitted by Mr. Balz), 1455, 1509, 1514 and 1517 (submitted by Ms. Wortmann-Kool). These amendments would provide real protection to investors, while delivering the ‘passport’ for eligible funds and fund managers and maintaining national discretion on access to national markets for non-EU funds and non-EU fund managers.

Yours sincerely,

Richard Saunders, CEO, IMA
Nigel Peaple, Director of Policy, NAPF
Andrew Baker, CEO, AIMA

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