The European Union’s Directive on Alternative Investment Fund Managers is set to come into force next month following formal approval by the EU Council at a meeting of transport, telecommunications and energy ministers on May 27, 2011.
The finalisation of the legislation has taken at least three months longer than originally expected. This follows delays resulting from the process of legal and linguistic revision to correct any typographical or drafting errors in the text approved by the European Parliament on November 11 last year and to ensure the internal consistency of the directive’s provisions.
Following revision by lawyer linguists appointed by the EU Council and the Parliament, the finalised text had to be translated into the various official languages of the European Union. The final version of the directive was published on May 13.
The directive will now be published in the Official Journal of the European Union within the next few days and will enter into force on the 20th day following publication. EU member states will then have two years to transpose the directive into their national legislation.
Detailed regulations and subsidiary legislation to implement the AIFM Directive, so-called Level 2 measures, will be drawn up by the European Commission on the basis of advice provided by the European Securities and Markets Authority.
Last month Esma issued a discussion paper on its proposed approach to the drafting of implementing measures, soliciting views from market participants on the policy options it proposes to recommend to the Commission. Following the delays to the finalisation of the directive’s text, the deadline for Esma to submit its advice has been put back to November 26.
The finalised version of the directive makes clear that the passporting arrangements for EU-domiciled funds run by managers also based within the union will take effect two years after the legislation comes into force, that is, around mid-2013.
According to the timetable set out in the directive, non-EU managers and funds should be able also to gain access to the passport some time after mid-2015, while the current national regimes permitting distribution of alternative funds through private placement arrangements are set to be abolished three years later, from mid-2018 onward.