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The Directive establishes an EU-wide harmonised framework for monitoring and supervising risks posed by Alternative Investment Fund Managers (AIFMs) and the funds they manage (AIFs); and for strengthening the internal market in alternative funds. The Directive requires the authorisation of AIFM. There are provisions relating to how AIFMs conduct their business, transparency and marketing. The Directive covers the investment managers of hedge funds, private equity funds, retail investment funds, investment companies, and real estate funds among others and is therefore relevant to many different types of asset manager.
The Government’s analysis was that Common Investment Funds (CIFs) and Common Deposit Funds (CDFs) meet the AIFMD definition of AIFs, except those constituted under church legislation. The Government would not impose requirements on the managers of CIFs and CDFs managing assets below the financial threshold at which the full Directive requirements must apply.
The FCA will assess whether a scheme is in compliance with UK retail investor rules on a case-by-case basis and will set out more details in due course around how it will consider the regime in which the scheme operates as part of this assessment. As proposed in the consultation, there will be transitional arrangements bringing existing recognised schemes into the new regime. The new approach will not alter the tax treatment of schemes subject to the recognised schemes gateway; for example they will still be eligible for inclusion within an ISA wrapper.
Decisions set out here have been informed by responses to the consultation and discussions with stakeholders. All decisions have been made with regard to the guiding principles set out in the consultation document, namely that the expectation that a “copy-out” approach will be adopted wherever possible in order to minimise the regulatory burden on firms. Gold-plating must be supported by strong justification. The Government’s proposed approach is consistent with this and is intended to maintain and enhance the UK’s competitiveness as a centre from which to manage and domicile funds. The approach is also intended to ensure strong consumer protection and to maintain and enhance confidence in the regulatory system.
Full document (including summary of responses)