Alternative Investment Management Association Representing the global hedge fund industry
01 June 2006
London, June 2006: Today, the Alternative Investment Management Association, AIMA, issued a clear warning to hedge fund managers not to drag their feet on implementing the Markets in Financial Instruments Directive (“MiFID”).
MiFID, which is due to be implemented in November 2007, will have a significant impact on hedge fund managers across the European Economic Area. AIMA warns that the volume and complexity of the new directive, in addition to a lack of some final information will leave such managers and other regulated entities facing a very tight implementation schedule.
Matthew Jones, Regulatory and Legal Manager at AIMA said: “Hedge fund managers need to start working on MIFID now.”
“Although an 18 month run up period sounds adequate, experience shows, particularly after the experiences of N2 and A-Day, that there is an instinct to leave serious implementation work to the last possible minute. Realistically this will not be possible with the new Directive. It has the potential to have a major impact on our members’ business structures, systems and documentation.”
Added to that is a further heavy workload with the likelihood of the FSA in the UK introducing a single set of Conduct of Business rules, even for regulated firms that are outside the scope of MiFID.
While AIMA has produced, for its members, an in-depth Preliminary Guidance ‘Matrix’ on how to prepare for the Directive, non-AIMA members will have to go through a steep learning curve and seek their own interpretation of the new arrangements.
Matthew Jones continued: “There are finite industry resources to carry out all the likely legal and structural work involved and these will become progressively scarcer as the industry approaches the November 2007 deadline. In the worst case scenario, a hedge fund manager that does not have its arrangements in place by then may have to cease trading until they are MiFID compliant.”
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For further information, please contact Eoin Brophy, Hume Brophy Communications on +353 (0) 86851 5477
1. About AIMA
Founded in 1990, AIMA is a not-for-profit global trade association with corporate membership in 46 countries, including over 520 in Europe. AIMA focuses specifically on hedge funds, managed futures and managed currency funds. More than 1000 corporate members (comprising 3500 individuals) enable the Association to create global tools for the benefit of its members, institutional investors and regulators. Its objectives are to increase investor education, transparency and promote due diligence and related sound practices, and to work closely with regulators and interested parties in order to promote the responsible use of alternative investments. AIMA’s membership includes fund of funds managers, institutional investors, hedge fund managers, prime brokers, exchanges, fund administrators, auditors, lawyers and other specialist service providers. Please visit us at www.AIMA.org.