For Alternate Investment Fund Managers (AIFMs) across Europe, this is a defining period. With Alternate Investment Fund Manager’s Directive (AIFMD) soon becoming a reality, European alternate investment fund (AIF) industry is entering a new phase. From marketing to management, governance and administration, the directive is changing every aspect of the AIF industry. While AIFMD is expected to open up new horizons to AIFMs, it will also widen the legal and regulatory requirements. But are the fund managers ready? How are the member states implementing the directive? How is the market responding to the regulated environment?
Any new change brings with it a period of confusion and dilemma. Similarly, in the case of AIFMD too, uncertainties and uneven progress mar the European alternate investment fund industry today. AIFMD is a complex piece of legislation. For European member states as well as for AIFMs, getting a grip of the regulation seems to be a tough task. Though almost all EU member states have transposed AIFMD into national law by 22 July 2013, only 12 member states have completed full legislation process. Member states have revised, improved or scrapped their existing law to accommodate the Europe wide directive, which aims to harmonise and regulate the industry.
For a EU AIFM, the directive will enable them to market their AIFs to EU professional investors in their home state and in other European member states, post authorisation. However, for non-EU AIFMs who will have to opt for private placement regimes in order to market their funds in EU member states, the situation is a bit more complex. Some member states have imposed additional requirements above the rules laid by the directive. For example, in Germany, the fund management regulation was scrapped and Capital Investment Act was introduced with new rules unique to Germany apart from the AIFMD requirements. They have also introduced new tax provisions along with it. Private placement regime is abolished and AIFMs will need to take approval from the German regulator to market or distribute any kind of AIFs.
While Germany may seem to be very rigid, some countries like Malta offer flexibility and cost advantage. AIFMs who wish to establish their funds in Malta will have 2 fund structures to choose from – alternate investment funds and professional investment funds. They also claim to process the authorisation application faster compared to other countries. Other countries like UK, Ireland, Sweden and Luxembourg also offer comparatively lighter regimes and require AIFMs to comply only with minimum rules laid out by AIFMD.
Ambiguity also prevails in the case of depositary regime. Depositary requirements are driven by a combination of factors like domicile of the AIFM and AIFs and their marketing practices. AIFMD requires all authorized EU AIFMs to appoint an independent depositary for the AIFs it manages. However, for non-EU AIFMs though AIFMD does not mandate appointment of depositary, countries like Germany, France and Denmark are making depositary regime mandatory. There are also variations in rules over appointment of domestic or cross-border depositary.
With such disparities and variations in implementation prevailing, the aim of creating a single market for non-UCITS funds still look distant. The impact of such an environment has created conundrums for AIFMs who will now be burdened with AIFMD as well as regulations of multiple jurisdictions. In the case of non-EU AIFMs there are apprehensions prevailing the proposed abolition of private placements once the passport regime becomes a reality.
According to a recent study by BNY Mellon, only fewer than 20 percent of AIFMs have submitted an application for AIFMD authorisation to their local regulator. The surveys also brought to light the fact that many AIFMs are still unclear or are yet to finalise their plans towards compliance. This slow rate of progress also highlights both the uncertainties and practical challenges the industry is facing while trying to get grips with AIFMD.
After the economic crisis, fund managers are already seeing a huge dip in their revenue. Now with AIFMD becoming a reality, they will also have to bear the cost of compliance. New systems and processes will need to be introduced to comply with risk and compliance requirements. The BNY Mellon survey points that firms expect a cost of around £1,50,000 per institution as a one-off set up cost of compliance. The final cost of compliance may far exceed the number. With such an impact on the cost structure, fund managers are in a dilemma whether to increase the cost of funds or to absorb the cost to gain market advantage.
The EU AIF market today is at a transitional stage in which confusion and dilemma prevails among AIFMs, regulators and to some extent among investors too. Both EU and non-EU AIFMs are closely monitoring the developments around AIFMD to take appropriate decisions. Market may bear brunt of this state of affairs now but once the directive becomes a reality and obtain more clarity, it will bounce back with vigour. The proposed passport regime, which is expected to become a reality in 2018, will also boost the market and bring back its lost glory.
Note about this guest post:
This is a complicated subject and this further information from Wikipedia explains why this legislation was passed in many countries in Europe
EU fund managers that manage alternative investment funds (essentially hedge funds and private equity funds) (“AIFs”) have not been subject to the same rules to protect the investing public as mutual (including UCITS) and pension funds and their managers. In general, the lack of financial regulation is seen by some to have contributed to the severity of the global financial crisis.
New emails secured through the FOIA by Judicial Watch shed new information on the Obama regime’s reaction to Benghazi.
The released emails appear to confirm what the Tea Party and conservatives have long believed, that the Obama Administration has been infinitely more concerned with avoiding blame than ensuring this kind of tragedy doesn’t happen again or finding justice for the families of those ruthlessly murdered.
• Print Length: 314 pages
• Publisher: Henry Maddox Publishing; 1 edition (February 24, 2013)
You’ve heard of “data mining”, but did you know that based on your web searches, your social media contacts and interactions, your clicking on internet ads and a whole lot more, companies can know if your daughter is pregnant before you do; can turn you down for a loan because your neighbors scores are low; can be turned down for a job because of correlations of your interests and losers; or based on your grocery purchases and diabetes that you can be turned down by your health insurer.
This is a book about marketing in the U.S by corporations whose only goal is to make profits at the expense of society. The book is a defense of capitalism, but not the capitalism that has no virtue or self respect practiced by so many. The answer is not more regulation by a growing federal presence, but enlightenment by consumers. This a book with a darn good story that will keep you turning pages through the night, because you won’t be able to sleep anyway after starting the book.
This is a book where you’ll learn the difference between self esteem, supported by our educational establishment and self respect. By the end of the book you’ll be cheering for the most unlikely man to lead us back from the edge.
Read the book I rated at five (5) stars, but I would give it ten (10) stars if I could.
Move over “Atlas Shrugged.”
Terry Stotts idol died today, Jack Ramsey after a 15 year battle with cancer.
“The thing about Jack was he was ahead of his time with the concept that you can have great individual players on your team, but if that talent is not connected, you don’t have a chance,’’ Davis said. “Jack developed that within us, nurtured it within us starting in training camp and never wavered from that.
“It was always about the team, not the individual,’’ Davis said. “As great as players as Walton and Lucas were, no one was bigger than the team. No one. And that was his message to us: If we do it together, we can get it done.’’
• Print Length: 289 pages
• Publisher: Ray Gorham; 1 edition (April 7, 2014)
Ray Gorham has written a must read book about an EMP attack on the U.S. that is gripping. Reminiscent of “The Road” by Cormac McCarthy, our protagonist, Kyle Tait, is caught in Houston when the attack happens and his wife and family are in Montana. Cars and phones and electricity are fried in the attack and America is thrust back to the dark ages.
American politicians have been warned about our vulnerability, yet have done little to protect citizens. They have been warned that upwards of half the population will die from lack of water, lack of food, disease, gangs, lack of medicine for the sick, etc. This book while fiction is based on fact. We need to be prepared for any eventuality; earthquake, EMP, and natural disasters. Ray Gorham shows us why.
Well that was fun, wasn’t it?
“Cover Oregon closed one of the sorrier chapters in the history of Oregon state government Friday when it opted to dump its troubled $245 million health insurance exchange in favor of the federal exchange.”
The Population is about 3.9 million so that’s almost $63 for every man, woman and child. The two of us could have had a nice dinner at a fancy restaurant for $126. Insteadwe got this screwing that just left us sore. Gov. Kitzhaber you are ultimately responsible for this disaster. I hope voters remember which party you belong to: The Democrat Party!
The Citizens Commission on Benghazi, a self-selected group of former top military officers, CIA insiders and think-tankers lands in the UK Daily Mail, but not seen in the MSM here, concludes that Obama’s regime switched sides in Libya and funneled guns to the, al-Qaeda-linked militants. Those guns are now in Syria.
The intelligence community was part of that, the Department of State was part of that, and certainly that means that the top leadership of the United States, our national security leadership, and potentially Congress – if they were briefed on this – also knew about this.
The Commission asserts “… the Obama administration’s early effort to blame the Benghazi attack on a protest against a crude anti-Muslim YouTube video ‘appears to have been well-coordinated with U.S.Muslim Brotherhood organizations as well as Islamic state members of the Organization of Islamic Cooperation (OIC).’ (emphasis added)
But, as Sec. of State Hillary Clinton said, “What difference does it make?”
In recent days the indices have been on the rise in almost all stock exchanges in the world, but the economic data published heralds continued economic reduction with emphasis on China. China was the engine of world growth, yet during the past…
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