IMA response on AIFMD highlights need for proportionality

14 September 2011

The IMA has now responded to ESMA's consultation on AIFMD Level 2. The IMA's response focuses on the diversity of funds caught by the Directive, and the need for proportionality in the treatment of alternative investment funds (AIFs).

The Directive applies to nearly two thousand investment vehicles in the UK alone, deploying a wide range of investment strategies, investing across asset classes and regions and using varying levels of leverage. Commenting, Julie Patterson, Director at the IMA, said: “Many still believe that the AIFMD is about the regulation of hedge funds and private equity. It is not. It covers a very wide range of investment vehicles – two thousand in the UK alone. The UK is perhaps unique in Europe in terms of the number and range of alternative investment funds ‘managed’ in some sense in or from the UK. The detail of the Level 2 measures should recognise and cater for this diversity.”

On systemic risk, Julie Patterson said: “While in some areas ESMA’s proposals succeed in addressing concerns in a proportionate and appropriate manner, that balance has not yet been struck in other areas, particularly systemic risk. Under the current proposals, national, European and international bodies risk being overloaded with superfluous data, which could lead to a build-up of system risk being overlooked. For example, it is important that information is focused so we can readily identify and monitor potential causes of systemic risk. We ask ESMA to take the IMA’s points on board when formulating its final advice to the Commission.”

Press release

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