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The arrival of the Alternative Investment Fund Manager Directive (AIFMD or the Directive) brings new registration obligations as well as new documentation and policies and procedures for advisers. The Directive not only impacts EEA investment managers of alternative investment funds, but also non-EEA advisers that wish to market such funds into the EEA. Here, we summarise the various ways ACA can assist your firm as you consider and implement the Directive.
Alternative Investment Fund Managers (AIFMs) managing Alternative Investment Funds (AIFs) from the UK are required to be authorised under the AIFMD by the FCA. The scope of the AIFMD requirements depends on whether a firm is classified as a 'full-scope UK AIFM' or a 'small authorised AIFM'. This determination is based upon a prescribed AUM of €100m, leveraged. Full-scope UK AIFMs are those that manage a sum equal to or greater than €100m and are subject to the full requirements of the AIFMD. Firms under this threshold, small authorised AIFMs, are those managing funds with 'sub-threshold' AUM. These firms may opt in to the full-scope of the Directive, but it is not required.
UK-based full-scope firms and small authorised AIFMs wishing to opt in to the full scope of the Directive are required to obtain the ‘managing an AIF’ permission by complexity of the forms listed below:
The primary objective for an applicant firm during the AIFMD VoP application process is to provide evidence to the regulator that the firm meets, and will continue to meet, the specific AIFMD requirements. Furthermore, the firm will be required to re-confirm that it meets the five Threshold Conditions of Authorisation, as outlined in the Financial Services & Markets Act 2000 (as amended).
For non-EEA firms, the timetable for authorisation differs. Although applications cannot be filed until 2015 at the earliest, ACA can assist these firms with preparation and explanation of the impact of this legislation. Irrespective of whether the fund manager (AIFM) is based in the UK or outside the EEA, ACA’s specialised team can assist in managing the entire preparation and application process.
The way in which firms market AIFs across the EEA is expected to change significantly over the coming years. Having established that your firm can utilise the marketing passport, ACA can help firms assess whether the passport would be advantageous to your business and at what point during implementation that will be. Until the AIFMD marketing passport becomes available, AIFMs of non-EEA funds must continue to rely on the National Private Placement Regimes in each EEA state in which they intend to market AIFs. To make use of such regimes in many member states, AIFMs must notify and seek approval from the relevant National Competent Authority of their intention to market, prior to marketing taking place.
ACA is available to assist with notifications to the FCA and offers a comprehensive, cost-effective solution for registration services in other member states to allow the marketing of AIFs in each jurisdiction. Where legal advice is required, ACA can assist in identifying local counsel familar with the registration process. ACA can assist with drafting documentation, policies, procedures and controls, train marketing personnel on the Directive's requirements, and help establish AIFMD compliance monitoring over fund marketing activities.
In the run up to and beyond the date of authorisation, ACA can assist firms with establishing an AIFMD compliance framework to operate alongside the existing FCA, SEC, NFA or other regulatory programme. Such a framework can be delivered either as part of a wider regulatory remit or as a stand-alone solution. This may include advice and guidance on AIFMD-compliant policies and procedures, ongoing support, periodic independent reviews, an annual regulatory audit or bespoke project(s).
ACA Technology Solutions offers firm-wide regulatory reporting services which cover AIFMD Annex IV, SEC Form PF, CFTC CPO/PQR, Albourne’s Opera and the SEC’s 13 D, F and H filings.
Specifically, the Annex IV reporting offering is fully supported by a recognised talent pool of compliance consultants who, together with technology and operations professionals, form a specialised Annex IV reporting team. The technology has been designed and developed with the end user in mind and has been delivered to many of our clients. Together the team has a decade of systems integration experience covering operational workflows and extensive financial product technology.
The solution typically consists of a software implementation on your own systems, or with your IT provider, that will create a centralised database drawing from your pre-existing data sources that will both manage and collate the information required for reporting. Having compiled the data for the reports, the system will then finalise the report in XML format and allow for automated submission to the appropriate National Competent Authority.
Although non‐EEA based fund advisers will not be required to seek authorisation under AIFMD until 2015 (at the earliest), they will still need to comply with some of the provisions of AIFMD if they wish to market into the EEA.
ACA can undertake an AIFMD gap analysis of documents and reporting controls of a non-EEA-based fund to compare current disclosures with those required under the Directive’s pre-investment and periodic disclosure requirements, as well as annual fund reporting requirements.
Our initial work on the gap analysis will focus on the following documents:
Once we have completed our review, we will then work with the client to address any gaps that have been identified – including drafting new text for non‐legal documentation as well as introducing practical AIFMD‐compliant procedures and controls to meet the requirements.
This information is provided for general information purposes only and does not constitute professional legal or consulting advice for any particular situation. Information is believed to be accurate as of the date of original publication. ACA undertakes no obligation to update such information to reflect subsequent developments or regulatory changes, or to provide notification of any such changes.
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