EVCA says implementation of AIFMD 'third country rules' must avoid concentrating risk for investors

27 September 2011

EVCA has warned against the implementation of such rules relating to non-EU managers and funds going beyond the intention of the AIFM Directive, which could unduly jeopardise investor choice and their ability to diversify risk.

On behalf of the European private equity and venture capital industry, EVCA has submitted a response to a consultation by the European Securities and Markets Authority (ESMA) on the implementation of third country rules in the AIFM Directive.

Dörte Höppner, secretary general of EVCA, said: "ESMA has proposed imposing an ‘equivalence’ test for the use of non-EU delegates and depositaries that is not supported in the Directive. The concept of equivalence was considered and dismissed in the AIFM Directive. It is unworkable and would ultimately work against a key goal of this legislation – to protect investors. By unreasonably restricting investor choice and access, the clear consequence would be a concentration of risk within investment portfolios. As the AIFM Directive text envisages, a level playing field between EU and non-EU managers can be effectively achieved through other means, such as cooperation agreements between regulators that assess outcomes, rather than through a line-by-line assessment of equivalence of their respective regulation."

Full response

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