19 December 2012

IMA responds to adoption of AIFMD regulation: "A disappointing outcome from a flawed process"

Julie Patterson, IMA Director of Authorised Funds and Tax, said that the Commission's decision to reduce ESMA's recommended threshold, above which extensive quarterly reporting on each AIF is required, would result in the industry and regulators 'drowning in data'.

“AIFMD is often billed as a hedge and private equity fund regulation. But it covers a very wide range of pooled investment vehicles, including non-UCITS retail funds (NURS), investment trust companies, VCTs, charity funds and pension fund pooling vehicles. Many of the provisions are workable and others have now incorporated points that the IMA raised. But some of the detailed provisions in this Regulation are out-of-sync or even conflict with other regulations that managers are required to follow and will impose additional costs for investors without conferring clear benefits.“

“The provisions on delegation are one example. They may require the setting-up of additional companies within groups, reduce investor choice in non-EU markets, bring non-EU funds into quarterly reporting to EU regulators and could render ‘multi-manager’ type strategies impossible. Both the Directive and this Regulation take effect from July of next year, leaving national regulators and industry alike with an impossible-looking deadline.“

“This is a disappointing outcome which arises out of a flawed process. The IMA will now work to help our Members implement the rules in such a way as to minimise disruption and incremental cost. We will also try to ensure that the process for exercises such as these is improved in the future so that we achieve better outcomes. All parties, including ourselves, need to identify how we can work together to deliver effective and efficient regulation that works in the interests of investors, whilst minimising complexity and cost.”

Press release

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