AIFMD II – European Parliament Final Report – Delegation

The AIFM’s liability towards its clients, the AIF and its investors shall not be affected by the delegation and sub-delegation(s), irrespective of the regulatory status or location of any delegate or subdelegate. The obligation for the AIFM to comply with the requirements of the AIFMD is irrespective of the regulatory status or location of any delegate or subdelegate.

The report analysing market practices regarding delegation and compliance with Articles 7 and 20 shall be provided by ESMA 24 months after the date of application of AIFMD 2, not 12 months.

Where the marketing function is performed by one or several distributors which are acting on their own behalf and which market the AIF under MiFID II or through insurance-based investment products in accordance with the Insurance Distribution Directive, such function is not a delegation subject to the other rules of Article 20 irrespective of any distribution agreement between the AIFM and the distributor. This change is in line with the fact that MiFID II and the Insurance Distribution Directive provide for distribution safeguards and with the Council position. The EU Parliament draft report refers to the contractual agreement with the distributor to assess whether there is a delegation of the marketing activity by the AIFM, but not the EU Parliament final report.

The peer review of the application of the delegation regime to be conducted by ESMA shall be conducted as a one-off comprehensive peer review analysis, whereas the EU Parliament draft report stated that ESMA may conduct such peer reviews as necessary.

Access the European Parliament Final Report of 2 February 2023 here.

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