AIFMD transparency rules
Impact on the annual report of AIFs
The AIFMD includes “transparency requirements”, which are related to the annual report, investor disclosures and regulatory reporting. This briefing outlines the impact of the transparency requirements on the report of the AIF in terms of how, when and in what format information might be disclosed.
The AIFMD, which was transposed into national law in Luxembourg on 12 July 2013, sets out minimum line items and disclosures that must be presented within an Alternative Investment Fund’s (AIF) annual report. An AIF is broadly defined as a collective investment vehicle other than a UCITS and includes all undertakings for collective investment established under part II of the amended Law of 2010 on undertakings for collective investment (Part II UCIs), qualifying specialised investment funds (SIF-AIFs) and qualifying risk capital investment companies (SICAR-AIFs) within a Luxembourgish context and potentially other unregulated vehicles.
Managers of vehicles potentially falling within scope should conduct a detailed analysis against the criteria outlined in ESMA’s “Guidelines on key concepts of the AIFMD” and seek advice to confirm their status.
The AIF annual report broadly reflects existing practices, recognising and relying on existing laws and regulations applicable to the preparation of annual accounts as well as the accounting rules laid down in the fund’s instruments of incorporation. However, the Directive does include a number of noteworthy changes and additions, particularly in relation to remuneration, leverage and liquidity.
Alternative Investment Fund Managers (AIFMs) also need to consider potential interaction with the investor disclosure requirements, which relate to pre-investment, regular and periodic disclosures. Material changes to pre-investment disclosures must be detailed in the annual report while in other cases it may be appropriate to include certain investor disclosures within the annual report as part of the periodic reporting. This briefing provides suggestions in that regard.