The European Union’s Directive on Alternative Investment Fund Managers will come into force on July 21 following its publication in the Official Journal of the European Union on July 1.
The directive received formal approval by the EU Council at a meeting of transport, telecommunications and energy ministers on May 27. It was formally signed at Strasbourg on June 8 by Jerzy Buzek, the president of the European Parliament, and Enikő Győ, Hungary’s minister of state for European affairs, on behalf of the EU Council.
The formal title of the legislation is now Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.
The finalisation of the legislation, which was agreed by EU economic affairs and finance ministers and then by the European Parliament last November, was delayed by the extended process of legal and linguistic revision to correct any typographical or drafting errors in the text and to ensure the internal consistency of the directive’s provisions, followed by translation into the various official languages of the European Union.
The final version of the directive was published on May 13. EU member states will now have until July 22, 2013 to transpose the directive into their national legislation. This is one day longer than the two-year period allocated for transposition, apparently because July 21, 2013 falls on a Sunday.
Detailed regulations and subsidiary legislation to implement the AIFM Directive, so-called Level 2 measures, will be drawn up by the European Commission over the next two years on the basis of advice provided by the European Securities and Markets Authority, which is due to report back in November. In April Esma issued a discussion paper on its proposals for implementing measures, soliciting views from market participants.
Under the legislation, EU-domiciled funds run by managers also based within the union will benefit from a ‘passport’ enabling them to be marketed to sophisticated investors throughout the union two years after the legislation comes into force, from July 22, 2013.
According to the timetable set out in the directive, Esma is due to report on the functioning of the passporting system and advise the Commission on its extension to non-EU managers and funds by July 22, 2015.
Three years after access is extended, presumably some time in the second half of 2018, Esma is due to publish its advice to the Commission on the planned abolition of current national regimes permitting distribution of alternative funds through private placement arrangements.