AIFMD: ESMA has published its Opinion on the functioning of the passport and NPPRs and its  Advice on the application of the AIFMD passport

15 August 2015

The Alternative Investment Fund Managers Directive (“AIFMD”), which entered into force on 22 July 2013, has introduced the EU marketing passport for EU domiciled Alternative Investment Fund Managers (“AIFM”) managing and marketing EU domiciled Alternative Investment Funds (“AIF”), whereas non-EU domiciled AIFMs remain subject to the national placement regimes (“NPPRs”) of each Member State where the AIFs are marketed.

In accordance with the provisions of the AIFMD, the European Securities and Markets Authority (“ESMA”) has published on 30 July 2015, two documents:

  • its Opinion on the functioning of the EU passport for EU domiciled AIFMs and of the NPPRs; plus
  •  its Advice on the application of the AIFMD passport to non-EU domiciled AIFMs and AIFs.

Both documents have been sent to the European Commission, European Parliament and European Council. The European Commission now has three months to consider whether or not to extend the AIFMD passport to non-EU domiciled AIFMs. Should the European Commission decide to extend the AIFMD passport to third countries, it shall adopt a Delegated Act specifying the date when this would become applicable in all Member States. Until then, the current situation will not change and non-EU domiciled AIFMs will remain subject to the NPPRs of each Member State.

With its Opinion, ESMA has taken into consideration the responses received to its call for evidence launched in November 2014. These responses and ESMA’s comments thereon are included in appendices to the documents released today and are rich in detailed information concerning some of the practical difficulties and even incoherencies encountered by market participants. After a first analysis on the functioning of the AIFMD passport and NPPRs, ESMA considers that the AIFMD has not been in force for a sufficient period of time to allow it to reach a final assessment. ESMA has also already identified several issues relating to the current situation with the passport such as different definitions of “professional investor”, “marketing” and “material changes” in various Member States. ESMA believes that a second opinion after a longer period of implementation in all Member States would be useful and permit to reach a final assessment, a comment that comes back several times in the documents.

ESMA’s Advice is mixed in that it esteems that AIFMD has been in force for too short a time for a balanced judgement to be possible, and in several of the cases under review, ESMA comments that it will need more time to adequately complete its analysis. In this Advice, ESMA has analysed the possible extension of the AIFMD passport to third-country AIFMs by conducting a country-by-country assessment. Only six non-EU jurisdictions have been considered – Guernsey, Hong-Kong, Jersey, Singapore, Switzerland and the United States of America (“US”) – are analysed in detail. Again ESMA comments it will need more time and more information with regards to these before even considering all the other jurisdictions upon which it must opine. It also notes that it will continue its work to finalise Memoranda of Understanding with other jurisdictions not yet covered. Nevertheless it is not anticipated that the process will be completed by the end of the year.

For Guernsey and Jersey, ESMA is of the opinion that there are no significant obstacles to the extension of the AIFMD passport to these two countries. The same will apply to Switzerland once the remaining obstacles identified by ESMA are resolved; this should happen once pending legislation comes into force. Regarding Hong-Kong, Singapore and the US, ESMA requires more time and information to reach a final conclusion.

Finally ESMA invites the European Commission to consider delaying approval and the attendant delegated Acts until such times as more in-depth analysis is available and raises the possibility that since only three non EU-jurisdictions have been “approved”, the European Commission may consider deferring any action until such time as more analyses have been completed.


The European Commission now has 90 days to consider ESMA’s Advice, and then the task of preparing the text for receiving approval from the European Parliament and European Council for the relevant Delegated Acts, if it decides to move forward on this basis.

The Opinion and Advice are available, in English, under the following link:

Should you require advice and assistance on cross-border distribution relating to both the AIFMD passporting and NPPRs opportunities, please do not hesitate to contact Deloitte’s AIFMD team of experts.


We trust this information is of assistance and remain at your disposal for any further questions.

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