The European Securities and Markets Authority is inviting feedback from members of the alternative investment industry on its proposed guidelines relating to key concepts of the European Union’s Alternative Investment Fund Managers Directive.
The directive, which provides a legal framework for both alternative investment funds (indirectly) and their managers within the EU, is scheduled to come into effect on July 22, 2013.
ESMA’s draft guidelines ( seek to clarify the rules applicable to hedge funds, private equity and real estate funds. They notably aim to tighten the definition of what types of entity fall within the scope of the AIFMD in order to ensure consistent application of the directive’s provisions throughout the EU and contribute to the creation of a level playing field among alternative funds.
The guidelines set out the criteria for determining what should be considered a collective investment undertaking, capital-raising, a defined investment policy, and the number of necessary investors.
In addition, ESMA has issued a consultation on its draft regulatory technical standards on types of alternative fund manager, which are also intended to facilitate the uniform application of the directive throughout the EU.
The technical standards ( distinguish between managers of funds whose investors have the right to redeem their shares at least annually (open-ended alternative investment funds), and those whose investors have less frequent redemption rights, which affects the asset threshold at which managers are obliged to comply with the directive’s requirements.
Both consultation papers stem from an earlier discussion paper published by ESMA in February. Some of the issues raised in that paper are not addressed in the new consultation exercises. ESMA says it plans to take into account the European Commission’s Level 2 implementing measures before deciding on the appropriate next steps in these areas.
The Level 2 regulation, which will have direct application throughout the EU without the need for transposition into national law, was also published on December 19.
The closing date for responses to the two consultation documents is February 2013. ESMA says the guidelines and technical standards will be finalised in the first half of next year – that is, before the scheduled implementation date of the AIFMD.