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AIFMD transitional provisions allow this in the short term. These managers may also be hoping that future events will enable them to access the EU market without needing to comply fully with AIFMD equivalent measures, but while that approach is understandable, it has disadvantages.
Fund managers that adopt a “wait and see” strategy face inherent uncertainties, in particular whether passporting rights will be granted to them at some point in the future and, if so, what form it will take.
Assuming a positive recommendation from the European Securities and Markets Authority, from July 2015, a non-EU manager may be able to market funds in the EU, and an EU manager may be able to market non-EU funds in the region. In order to do so, however, they will have to comply with AIFMD equivalent measures and ESMA must have approved the home jurisdiction of the manager (if not in the EU) for that purpose. Bearing in mind the somewhat political background of the directive and concerns of the EU to ensure domestic managers are not disadvantaged or the intended affects of AIFMD diluted, there is a real risk that such approval by ESMA won’t be forthcoming. At least one politician who negotiated AIFMD at the EU level believes that such approval is still conceptually a long way off.
The “wait and see” approach could involve delaying the launch of new funds or launching them outside the EU. Disadvantages include the inability initially to use the EU-wide marketing passport, restrictions being placed on utilising Member State private placement regimes (most Member States have altered their private placement regimes as a consequence of AIFMD; some such as Germany have become very restrictive) and the risk that passporting rights will not be extended to them in 2015 or beyond.
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