European Union: European Commission publishes proposals for amendments to the Directive on alternative investment fund managers

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On November 25, 2021, the European Commission (the “Commission“) published a legislative proposal containing targeted amendments to Directive 2011/61 / EU (” the “AIFM“) and (to some extent) the UCITS Directive (“AIFMD proposalsThe AIFMD proposals are part of four proposals by which the Commission aims to honor several key commitments of the European Union’s 2020 action plan on Capital Markets Union.

The Commission recognizes that the AIFMD has generally worked well in terms of introducing a harmonized supervisory framework for AIFM managers (“AIFMHowever, the AIFMD Proposals set out some key proposed amendments to the AIFMD, including (but not limited to the following topics):

  • Delegation: increased control of the delegation methods, in particular when the manager delegates alternative investment funds (“FIA“) management activities to third countries;
  • NPPR: Lack of national private placement regimes (“NPPRs “) for non-EU AIFs or non-EU AIFMs in certain high-risk or non-fiscally cooperative jurisdictions;
  • Liquidity management: Liquidity risk management tools made available and used by managers of open-ended AIFs and UCITS;
  • Regulatory reports: Streamlining of data reporting requirements;
  • Loan Fund: Proposals to introduce harmonized requirements for loan funds; and
  • Custodians: expand the depository market to enhance competition while respecting EU standards for depositary services.

Next steps and timetable:

The AIFMD’s proposals are still in their early stages – they are currently being considered by the European Parliament and the Council of the EU and it is expected that an agreement could be reached by mid-end. 2022. This would lead to publication in the EU Official Journal in early 2023 and entry into application of the AIFMD proposals in early 2025. Managers and other market players should therefore continue to monitor these developments and engage in discussions with the sector. .

European Commission publishes proposals for amendments to the Directive on alternative investment fund managers

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