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On November 25th, 2021, the EU Commission published a proposal "COM(2021)721 final" to amend Directive 2011/61/EU on Alternative Investment Fund Managers (the "AIFMD II").

We have summarized for you the main changes proposed by the European Commission to revise the Alternative Investment Fund Managers Directive 2011/61/EU (the "AIFMD", the "AIFMD II"), which will be relevant for alternative investment fund managers (the "AIFM"):


1. Ancillary services, Art. 6 (4) AIFMD II

The list of ancillary services that the AIFM may provide in addition to collective investment management is extended to include:

  • Benchmark administration in accordance with Regulation 2016/1011/EU (Benchmark Administration); and
  • Credit servicing.


2. AIFM Authorization, Art. 7 (2) AIFMD II

  • Detailed description of the appropriate human and technical resources when applying for AIFM authorization to be used for the performance of the AIFM's functions and, in the case of delegation arrangements, for the supervision of delegates.
  • At least two natural persons (who actually conduct the business of the AIFM) residing in the European Union be employed on a full-time basis or undertake on a full-time basis to conduct the business of the AIFM.


3. AIFs with lending operations, Art. 15 (3) (d), 4a-4e, 16 (2a) AIFMD II

EU-authorized AIFMs that manage alternative investment funds (the "AIFs") that make loans are subject to new requirements, including:

  • Implement and maintain effective lending policies, procedures, and processes to be reviewed at least annually;
  • Limitation of loans to a single borrower by the AIF to a maximum of 20 % of the capital of the AIF (subject to the application of specific conditions under the ELTIF, EuVECA or EuSEF Regulations), if the borrower is a financial undertaking, an AIF or undertakings for collective investment in transferable securities (the "UCITS") (in case of capital increases or decreases of the AIFs, this limit is temporarily suspended for up to 12 months);
  • AIFs that do not extend credit to their AIFM or its employees, their depositary or its agents;
  • AIFs that retain 5 % of the nominal value of the loans they originate and sell on the secondary market on an ongoing basis, unless the loans were acquired on the secondary market; and
  • AIFs that have a closed-ended structure if they lend to a significant extent (more than 60 % of the net asset value of the AIF).

In addition, Annex I of AIFMD II explicitly confirms that originating loans and servicing securitisation special purpose entities are activities that may be carried out when managing AIFs.


4. Liquidity management, Art. 16 (2b), (2c), (2e) AIFMD II

AIFMs managing open-ended AIFs will be able to access the necessary liquidity risk management tools (the "LMT") in exceptional circumstances.

In addition to the possibility to suspend redemptions, AIFMs must select at least one other LMT from Annex V of the AIFMD that harmonizes the minimum list they can use in the interest of the AIF's investors.

In addition, AIFMs must inform the competent authorities of the activation or deactivation of an LMT.


5. Delegation, Recital (8) AIFMD II

The delegation rules shall apply to all functions listed in Annex I of the AIFMD and to the ancillary services referred to in Art. 6 (4) of the AIFMD.


6. Depositary, Art. 21 (11) AIFMD II

The Central securities depositories (the "CSDs") are included in the custody chain if they provide competing custody services.

Depositaries are exempted from the obligation to conduct an ex ante due diligence if the depositary is a CSD.

Competent authorities may allow depository services to be provided in other Member States pending action following a review of the need to introduce a depository passport.


7. Disclosure to investors, Art. 23 (1) and (4) AIFMD II

According to Art. 23 AIFMD II, additional disclosures are required for investors:

  • Additional information on the conditions for the use of LMTs;
  • Fees and costs borne by the AIFM or its affiliates;
  • On a quarterly basis, all direct and indirect fees and costs charged or allocated directly or indirectly to the AIF or any of its investments;
  • The portfolio composition of loans originated;
  • Any parent company, subsidiary or special purpose entity established by the AIFM, its employees or its direct or indirect affiliates in connection with the investments of the AIF.


8. EU AIFMs marketing non-EU AIFs without passport, Art. 35 (2) (b) and (c), 36 (1) AIFMD II

The following new requirements are added:

  • The third country in which the non-EU AIF is domiciled is not classified as a high risk third country pursuant to Art. 9(2) of Directive 2015/849/EU.
  • The third country has signed a qualified tax information exchange agreement with the home Member State of the EU AIFM and with the Member States where the marketing takes place, and
  • The third country is not classified as a high-risk country under the latest European anti-money laundering laws.


9. National Private Placement Regime ("NPPR"), Art. 42 AIFMD II

New requirements for non-EU AIFMs seeking to market EU or non-EU AIFs through the NPPR:

  • The third country where the non-EU AIFM or the non-EU AIF is established is not on the EU list of non-cooperative countries for tax purposes;
  • The third country has signed a qualified agreement on the exchange of information in tax matters with the Member State in which the distribution takes place; and
  • The third country is not classified as a high risk country according to the latest European laws against money laundering.



Published: June 2022

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