An AIFM should provide information on the instruments in which it is trading, markets of which it is a member or where it actively trades, and the exposures and holdings of each AIF it manages, along with relevant identifiers to connect the data provided on assets, AIFs and AIFM to other supervisory or publicly available data sources. The disclosure of the exposure and holdings of each AIF is broader than the existing AIFMD, the Commission proposal and the European Parliament draft report, which refer to “principal exposures” (AIFMD) and “exposures” (Commission proposal and Parliament report), but not to the holdings of each AIF. The reference to “relevant identifiers to connect the data provided on assets, AIFs and AIFM” is also new compared to the Commission proposal and the European Parliament draft report.

Although the obligation to report to the regulatory authorities information on the main categories of assets in which the AIF is invested is deleted in the Commission proposal, the Council position replaces this requirement with the following:

Obligation to report information on delegation arrangements that involve the delegation of collective or discretionary portfolio management or risk management functions as follows:

• Information on delegates, specifying their name and domicile, whether they have close links with the AIFM, and whether they are authorised or regulated entities for asset management. The information should include relevant identifiers of the delegates to connect the information provided to other supervisory or publicly available data sources.
• A list and description of activities relating to risk management and portfolio management functions that are delegated.
• Where the portfolio management function is delegated, the amount and percentage of the AIF’s assets which are subject to delegation arrangements.
• The number of full-time equivalent human resources employed by the AIFM to monitor delegation arrangements.
• A description of periodic due diligence measures carried out by the AIFM to oversee, monitor and supervise the delegate, including the date of performance of these measures, issues identified and, where relevant, measures and timeline adopted to address these issues.
• Where sub-delegation arrangements are in place, information required in points (i) to (iii) on the sub-delegates and activities related to the portfolio and risk management functions that are sub-delegated.
• The commencement and expiry dates of delegation and sub-delegation arrangements. Some information included in the other relevant economic and accounting information in the European Parliament draft report is not included in the Council position, such as reporting of the total amount of leverage of the net assets employed by the AIF.

The Council position has added the following reporting obligation to the regulatory authorities: the list of member states in which the units or shares of the AIF are marketed by the AIFM or by a distributor acting on behalf of that AIFM. However, the Council position shortens the current obligation to report the current risk profile of the AIF and the risk management systems employed by the AIFM to the current risk profile of the AIF only. Neither the Commission proposal nor the European Parliament draft report includes such provisions.

AIFMs should, for each EU AIFs that they manage and for each AIF that they market in the EU, disclose to investors:

• The originated loan portfolio.
• On an annual basis, all direct and indirect fees and charges directly or indirectly charged or allocated to the AIF or any of its investments.
• On an annual basis, any parent company, subsidiary or special purpose entity established in relation to the AIF’s investments by the AIFM, its staff or direct or indirect affiliates.

The difference from the Commission proposal is the frequency of such disclosure, annually in the Council position and the European Parliament draft report, but quarterly in the Commission proposal.

Access the European Council position of June 2022 here.