Trialogue meeting endorses EU AIFM Directive compromise

Representatives of the European Parliament, the European Commission and European Union member states have endorsed with minor changes the version of the Directive on Alternative Investment Fund Managers agreed last week by EU economic affairs and finance ministers.
The accord by the so-called ‘trialogue’ meeting means that both the Parliament and the European Council, which in May approved conflicting drafts of the directive, have now signed up to the compromise proposal and paves the way for a vote on the proposal in a full session of the Parliament in the second week of November.
The compromise text introduces an EU marketing ‘passport’ for alternative fund managers whether based within the 27-member union or (after a two-year transition period, and subject to compliance with EU standards)) outside it.
It also preserves the existing system of country-by-country private placement rules for distribution of alternative funds for at least five years, or until the Commission determines that the passport system is operating satisfactorily.
The agreement has been criticised both by industry members, who say it retains measures that will add disproportionate costs and regulatory burdens, and EU parliamentarians lamenting that the legislation does not impose stricter rules on alternative funds. However, the Parliament is widely expected to give the directive a first reading at its plenary session in Brussels on November 10th and 11th.