11 October 2013

AIMA: Some key EU markets gold-plating AIFMD

While several countries including the UK, Ireland, Sweden and Luxembourg are requiring non-domestic AIFMs to comply only with the minimum rules laid down by the AIFMD when using private placement in their countries, some countries have chosen to impose additional requirements.

France has elected to impose such significant additional requirements on non-domestic AIFMs seeking to market under France’s private placement regime that they will find it extremely difficult to market AIFs in France. Germany is one of a small number of EU countries that will require non-EU AIFMs of non-EU AIFs to appoint an entity to carry out the so called “depositary-lite” duties of cash monitoring, safekeeping of assets and oversight and verification, a requirement under the Directive applied only to EU AIFMs marketing non-EU AIFs.

Jiri Krol, AIMA’s Deputy CEO, Head of Government & Regulatory Affairs, said: “Investors in those jurisdictions that have gold-plated the minimum requirements set out in the Directive for the national private placement regimes will have a more restricted selection of funds to choose from compared to peers in other countries. However those Member States which sought the preservation of private placement regimes have provided transitional relief and refrained from imposing additional rules.”

Other requirements across Member States are not uniform. At least nine countries will require EU AIFMs marketing non-EU AIFs in their jurisdictions to engage a qualified auditor to perform statutory audits of each non-EU fund under the EU’s Statutory Audits Directive, potentially increasing those funds’ audit costs.

At least seven countries intend to allow AIFMs of EU AIFs to appoint a depositary in a country other than the country of the fund’s domicile – an option which, if introduced more widely, could generate greater competition in the depositary sector.

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