AIFMD – What’s next?
by Emmanuel Gutton, Director Legal & Tax
A few weeks after the release in June 2020 of the European Commission’s report assessing the application and scope of the Alternative Investment Fund Directive (AIFMD), ESMA sent a letter to the European Commission highlighting 19 priority topics which in its views should be considered during the forthcoming AIFMD review.
This letter addressed key aspects of the AIFMD in relation to which, according to ESMA, improvements could be made. It referred in particular to some harmonisation between UCITS and AIFMD rules, liquidity management tools, depositary rules, reporting regime and data and delegation and substance requirements.
In October 2020, the European Commission published an extensive consultation, containing 102 questions, with a large scope covering all aspects of the AIFMD framework (including most of the items raised in the ESMA letter).
As from that date, ALFI started preparing a response with no less than 20 working groups composed of members representing a substantial portion of the Luxembourg asset management industry and its diversity (taking into consideration the different asset classes, across a broad sectoral geographical representation of the asset management industry in Luxembourg, set-up, core business etc.). ALFI also performed some advocacy work, liaising with numerous professional associations representing various EU and non-EU countries and/or asset management sectors. ALFI also interacted with policymakers in Luxembourg and European institutions in Brussels.
The ALFI response to the consultation was published on 29 January 2021. It contains a series of key messages among which the following ones are topical:
- “Do not fix what is not broken”. A consensus was reached among ALFI members on the fact that the AIFMD has succeeded in creating a single market for AIFs and in strengthening investor protection and financial stability;
- Keep the AIFMD as a “manager” directive. The spirit of the AIFMD should be maintained and the AIFMD review should not trigger any change in this respect;
- Do not put the delegation framework at risk. Accordingly, the current rules on delegation which apply regardless of the location of the delegated portfolio manager should continue to apply.
ALFI organised a well-attended webinar on 2 February 2021 during which the new chair and vice-chairs of the ALFI Regulation Advisory Board presented the content of the ALFI response to the consultation to our members.
Since then, over the last few months, ALFI has continued interacting and exchanging views with many stakeholders and policymakers, at national and international levels.
A draft legislative proposal is expected in the second half of 2021 but the content of the proposal is not known yet. Some declarations made by representatives of the European Commission at the occasion of recent public events are rather reassuring. Nevertheless, ALFI will continue to make its members’ voice heard and promote a targeted and technical review of the AIFMD based on actual past experience as initially contemplated by the AIFMD itself.
Finally, on each occasion ALFI will reiterate its cornerstone conviction that notwithstanding the amendment considered, the investor’s interest shall be the main (if not the only one) criterion to assess the suitability of a proposed change to the AIFMD.