AMF launches a consultation on the transposition of the AIFM Directive

15 June 2012

An AIFMD Stakeholders' Committee chaired by Monique Cohen and Jean-Luc Enguéhard, both members of the AMF Board, has come up with 25 recommendations for transposing the Directive.

The purpose of the AIFM Directive is to regulate managers of funds other than UCITS to detect and prevent systemic risks related to alternative investment management. It will require managers exceeding the thresholds for assets under management set in the Directive to comply with obligations relating notably to supervision, operating rules, depositaries and transparency, enforced through a specific authorisation procedure and periodic reporting. The Directive concerns nearly two-thirds of management companies operating in France and half of French funds.

The draft report by the AIFMD Stakeholders’ Committee highlights the substantial advance of the French fund management industry in terms of compliance with the Directive’s requirements and the role that some funds, such as private equity funds, play in financing the French economy. The European passport makes the context increasingly international: management companies and their products will be allowed to enter a country and offer their services without the national regulator having any say. It is therefore critical to urge these participants to establish themselves and domicile their funds in France under the supervision of the AMF, which has made investor protection and financial stability its core priorities. To this end, the draft report by the AIFMD Stakeholders' Committee calls for the Directive to be implemented faithfully and makes recommendations in the following areas:

• Stepping up international promotion of the Paris financial centre: The AIFMD Stakeholders' Committee recommends promoting French fund management of alternative investment funds (AIFs) internationally by intensifying the action initiated by transposing the UCITS IV Directive, as recommended by the Financial Services High-Level Committee in its October 2010 report in order to make the Paris financial centre more attractive to fund managers and investors.
• Seizing the opportunities created by the Directive to give fresh impetus to French fund managers: The AIFMD Stakeholders’ Committee recommends maintaining a single management company regime, which can be modulated through a specific programme of operations that matches the features of each type of strategy. With regard to the requirement for the risk control function, the report advocates applying the proportionality principle, for example, in the case of managers of private equity or real estate funds.
• Reshaping the range of French funds to make it clearer: The AIFMD Stakeholders’ Committee recommends reshaping and simplifying the regulatory range of French funds into three categories: UCITS, AIFs marketed to retail investors (including retail non-UCITS or other specialised retail funds) and AIFs marketed to professional investors. The report also recommends harmonising subscription thresholds designed to ensure that the most complex and riskiest products are marketed only to professional investors, as well as reviewing the AIFs’ eligibility rules for institutional investors.
• Ensure a level playing field for depositaries: Given that French depositaries are already compliant to a large extent with the provisions of the AIFM Directive, the AIFMD Stakeholders’ Committee analysed the challenges that the AIFM Directive raises for French depositaries in terms of competition. It recommends consolidating the current framework and seizing the opportunities created by the Directive to develop additional activities. The Committee also calls for a level playing field between French depositaries and branches of foreign investment services providers.

Press release

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