The European Securities and Markets Authority has issued a discussion paper on its proposed approach to implementing measures of the European Union’s Alternative Investment Fund Managers Directive.
Esma is soliciting views from market participants on the policy options it is proposing to recommend to the European Commission, which is responsible for drafting so-called Level 2 regulations and subsidiary directives setting out the details of how the AIFM Directive should be applied.
Last December the Commission requested advice on Level 2 measures from Esma’s predecessor body, the Committee of European Securities Regulators. Following delays to the finalisation of the directive’s text, the deadline for Esma to submit its advice to the Commission has been put back to November 26.
Due to the broad scope of the directive, the Commission’s request for advice has been divided into four parts. Part I covers general provisions, authorisation and operating conditions, Part II the role of the depositary, Part III transparency requirements and leverage, and Part IV supervision.
The discussion paper notably asks for stakeholders’ views on how to identify the portfolios of alternative investment funds under management by a particular fund manager and the calculation of the total value of assets under management, how leverage influences assets under management, how to determine the value of a fund’s assets under management for a given calendar year, and how to treat potential cases of crossholding among funds.
It seeks the industry’s views on how to treat managers whose total assets occasionally exceed and/or fall below the relevant threshold for authorisation under the directive, and what registration requirements should exist for entities falling below the threshold.
The paper also invites comment on how the obligation on managers to register with national authorities should be implemented, suitable mechanisms for gathering information, and what procedures should exist for small managers to opt in to regulation under the directive.
Market participants have until May 16 to respond to the discussion paper. Contributions should be submitted online at under the heading ‘Consultations’.
Esma says the responses it receives will help to narrowing down its policy approach and develop a formal proposal for possible implementing measures for the AIFM Directive in the summer of 2011. This proposal will be subject to a public consultation, whose results will be used by Esma to finalise its advice to the Commission.