Alternative Investment Management Association
02 April 2012
The Alternative Investment Management Association (AIMA), the global hedge fund trade association, has expressed concern about the European Commission’s new draft text for the implementation of the Alternative Investment Fund Managers Directive (AIFMD).
The European Commission proposed the new text in response to advice received on implementation of AIFMD by the European Securities and Markets Authority (ESMA). It is seeking to implement AIFMD swiftly through the format of a “Regulation” which enters effect more quickly than a “Directive”, which is transposed into national law and offers member states more flexibility of implementation. The Commission has given EU member states and the European Parliament only two weeks to respond to this new text.
Andrew Baker, AIMA CEO, said: “We are concerned that this draft Regulation appears to significantly and substantially diverge from the ESMA advice in a number of key areas, including third country provisions, depositaries, delegation, leverage, own funds, professional indemnity insurance, appointment of prime brokers and calculation of assets under management.
“We fully respect the Commission’s right not to follow ESMA advice when producing secondary legislation. However, there should be more transparency and better consultation if the Commission has decided to depart from the advice in such crucial areas for the global asset management industry.”
As a global trade association AIMA is particularly concerned about the international ramifications of the third country provisions. These relate to non-EU jurisdictions (such as the United States, Canada, Hong Kong, Singapore, Japan, Australia and Brazil) and how managers operating in those jurisdictions may access EU investors.
Andrew Baker, AIMA CEO, said: “The proposed third country provisions do not appear to reflect advice the European Commission received from ESMA on implementing AIFMD. The Commission is contemplating a requirement that EU and non-EU regulators sign co-operation agreements which are legally binding on both parties. These would be extremely problematic if not impossible to conclude if the Regulation prescribes that the cooperation agreements ensure that third country regulators enforce EU law in their territories. It could be extremely difficult for many regulators to be able to sign up to that. We urge the Commission to clarify this issue in their final text.
“Without cooperation agreements, asset managers outside the EU will not be able to access investors in the EU except through reverse solicitation. This would close the door to national private placement regimes in the EU, which would have a major impact on asset managers globally. It would also prevent delegation of portfolio management outside of the EU, which would be of great concern for global asset managers.
“ESMA has made it clear in its advice that cooperation agreements are to be signed on a best-efforts basis and are meant to reflect international norms such as the IOSCO Multilateral Memorandum of Understanding. We hope the Commission follows this advice.”
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For media enquiries, please contact Dominic Tonner, AIMA’s Communications Manager.
Tel: +44 (0)20 7822 8380; Email: firstname.lastname@example.org
As the global hedge fund association, the Alternative Investment Management Association (AIMA) has over 1,300 corporate members (with over 6,000 individual contacts) worldwide, based in over 40 countries.
Members include hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting firms, investors, fund administrators and independent fund directors. They all benefit from AIMA’s active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals and its excellent reputation with regulators worldwide.
AIMA is a dynamic organisation that reflects its members’ interests and provides them with a vibrant global network. AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the industry’s first and only specialised educational standard for alternative investment specialists. For further information, please visit AIMA’s website, www.aima.org.