07 January 2021

EFAMA’s Response to the European Commission Roadmap on the review of EU rules on alternative investment fund managers

The AIFMD is one of the pillars of EU regulation for asset managers and investment funds, which have a crucial role to play in the development of the Capital Markets Union (CMU) and the post Covid-19 economic recovery in the EU.

The Commission’s Report to Council and Parliament assessing the application and the scope of Directive 2011/61/EU on alternative investment fund managers provides a balanced analysis leading to the conclusion that, overall, the AIFMD regime is working well. We welcome the recognition that the framework has improved the monitoring of risks for the financial system and the cross-border raising of capital for investments in alternative assets. We also agree on the assessment of the important role played by the AIFMD in creating an internal market for AIFs and reinforcing the regulatory and supervisory framework for AIFMs in the Union. AIFMs are now operating with greater transparency for investors and supervisors, helping building confidence in financial markets.

When identifying possible areas of action, the Report is weighted and prudent, acknowledging the need for a holistic approach and the importance of assessing the impact of potential amendments to the directive and its implementing acts.

Against this solid analysis, also underpinned by the conclusions of the report mandated to KPMG, and in the absence of evidence of market failures, it is our strong belief that the upcoming AIFMD review should only introduce targeted changes either at Level 2 or Level 3 when necessary and duly justified by factual evidence of shortcomings. It is important to bear in mind that any change to the current framework might create more uncertainties, generating more operational costs to apply those changes.

EFAMA looks forward to further contributing to the AIFMD review notably by providing a detailed and evidence-based response to the European Commission’s consultation running until the end of this month. We have set out below our high-level views on the key sections of the European Commission’s consultation document on AIFMD.

Functioning of the AIFMD Framework

In general, the AIFMD sets a high standard of harmonisation in the alternative investment fund management sector and ensures a consistent regulatory approach to potential risks to the financial system, better coordinated supervision, a high level of investor protection and facilitates the market integration of EU AIFs. We see the need for a few well-targeted amendments through Level 2 and Level 3 to improve the effectiveness of AIFMD by avoiding different approaches at national level. Such targeted amendments will be further outlined in our consultation response. It is important in any case to ensure a consistent application of rules across Member States. In order to ensure a level playing field among AIFMs, NCAs should be bound to apply similar interpretations at national level.

In terms of additional improvements to the functioning of the AIFM passport, at present, we do not believe that the cross-border marketing and investor access rules for AIFs (as well as for UCITS) need to be reviewed, pending the application of the most recent amendments to both UCITS and AIFM directives, published in June 2020. We note in particular that the amending directive (2019/1160) is presently awaiting Member States’ transposition and will only apply as from 2 August 2021....

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