EU assesses AIFMD, opening the ground for AIFMD II

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EU assesses AIFMD, opening the ground for AIFMD II

11 June 2020

Regulatory News Alert

Context and objectives

On 10 June 2020, the European Commission published its report assessing the application and the scope of Directive 2011/61/EU of the European Parliament and of the Council on alternative investment fund managers (AIFMD).

The report assesses whether the rules of the AIFMD are effective, efficient, coherent and relevant, and if they help to enforce the objectives of the Directive. This assessment should lead to a review of AIMFD in the areas identified. The main findings of the report concern:

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1.    Impact on AIFs and AIFMs:

  • The efficacy of the EU AIFM passport is impaired by national gold-plating, divergences in the national marketing rules of the AIFMD by national supervisors.
  • The AIFM passport only provides marketing rights to professional investors, restricting the cross-border activities of AIFMs.
  • The AIFMD third-country passport was not assessed, as it has not yet been activated.
     

2.    Impact on investors:

  • Market figures demonstrate increased sales of AIFs with greater participation of retail investors in several Member States, as AIFMD has increased the transparency of the offered products and services.
  • The need for clarification for situations where AIFMs use tri-party collateral management or when central securities depositories act as custodians.
  • The lack of a depositary passport does not follow the objectives of the single market.
  • The need to clarify the binary nature of the valuation rules.

 

3.    Impact on monitoring and assessment of systemic risk:

  • The need to consider the rationalization of supervisory reporting requirements.
  • The need to reassess the setting of common standards for loan-originating AIFs.
  • The need to adjust the conclusion of the work of the Financial Stability Board and IOSCO in the leverage calculation methods area.
  • The need for alignment of the AIFMD rules on remuneration with similar regimes in other sectorial legislation (for example, the Capital Requirements Directive).

 

4.    Impact of rules on investment in private companies and in/or for the benefit of developing countries:

  • The need to better accommodate the private equity sector by removing unnecessary charges and to more effectively protect non-listed companies or issuers.
  • AIFMD does not appear to impose regulatory restrictions that would hinder investments in or for the benefit of developing countries.

 

Next steps

Further action will be required at EU level to deepen the EU market for AIFs and respond to technological developments to ensure that the AIFMD legal framework is fit for purpose.
 

How can Deloitte help?

The Deloitte Regulatory Watch Kaleidoscope service helps you stay ahead of the regulatory curve by identifying changes to your environment and to allow you to better anticipate, manage and plan upcoming regulations on the way to AIFMD II.

Deloitte’s advisory specialists and dedicated services will help you design and implement your business strategy in light of the future evolution of the regulatory framework and market trends.

Additionally, through its Reporting Factory service, Deloitte offers a range of solutions for forthcoming investment funds reporting requirements tailored to your business needs.

Deloitte’s RegWatch Kaleidoscope service actively monitors AIFMD and UCITS developments and publications on an ongoing basis. We carefully analyze all relevant published documents to identify any changes and to provide the most updated view to our clients.

Deloitte teams can assist you at any stage of your operation lifecycle through our wide range of services:

  • Service provider selection and due diligence.
  • KPIs definition and dashboard implementation.
  • Marketing and commercial strategy.
  • CSSF license application.
  • IT strategy.
  • AIFM operating model definition.
  • Market research and analysis.

Contacts

Subject matter specialists

Vincent Gouverneur
Partner – EMEA Investment Management Leader
Tel: +352 45145 2451
vgouverneur@deloitte.lu

Xavier Zaegel
Partner – Capital Markets & Financial Risk Leader
Tel: +352 45145 2748
xzaegel@deloitte.lu

Lou Kiesch
Partner – Regulatory Consulting Leader
Tel: +352 45145 2456
lkiesch@deloitte.lu

Lize Griffiths
Partner – Real Estate Industry Leader
Tel: +352 45145 2693 
lizgriffiths@deloitte.lu

Nick Tabone
Partner – Private Equity Leader
Tel: +352 45145 2264
ntabone@deloitte.lu

 


Regulatory Watch Kaleidoscope service

Simon Ramos
Partner – IM Advisory & Consulting Leader
Regulatory Watch services Co-Leader
Tel: +352 45145 2702
siramos@deloitte.lu

Jean-Philippe Peters
Partner – Risk Advisory & Regulatory Watch services Co-Leader
Tel : +352 45145 2276
jppeters@deloitte.lu

Benoit Sauvage
Director – RegWatch, Risk Advisory 
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Regulatory & Consulting
Tel : +352 45145 2311
mvuksic@deloitte.lu

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