AIFMD II – European Parliament draft report – Delegation

The European Parliament draft report has modified the Commission proposal by removing the reporting by national regulators to ESMA of situations in which an AIFM delegates more portfolio management or risk management functions than it retains. The second point of the delegation section in the  Commission proposal is completely deleted in the European Parliament draft report, including the reference to draft RTS to be drawn up by ESMA and adopted by the Commission in relation to delegation notifications and their transmission.

Regarding reports analysing market practice regarding delegation to entities in third countries, the European Parliament draft report specifies only one report 12 months before the five-year review by the European Commission of the functioning of the rules laid down in the AIFMD and experience acquired in applying them.

If the marketing function is performed by one or multiple distributors not acting on behalf of the AIFM, under an agreement between the AIFM and these distributors, this function shall not be considered to constitute delegation subject to the delegation provisions of the AIFMD. The provisions relating to delegation (article 20 of the AIFMD) should not apply to such arrangements. This exemption is not included in the Commission proposal.

Access the draft report of 16 May 2022 from the European Parliament here.

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