January 24, 2021

Volume XI, Number 24


January 22, 2021

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January 21, 2021

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European Commission Reports on the Operation of the AIFMD

On January 10, the European Commission published a report (dated December 10, 2018) on the operation of the Alternative Investment Fund Managers Directive (AIFMD).

The EC commissioned KPMG to conduct a general survey of the main stakeholders most affected by the AIFMD and carry out an evidence-based study, the key findings of which are set out in the report. The report concludes that the AIFMD has clearly played a major role in helping to create an internal market for alternative investment funds (AIFs) and a harmonized and stringent regulatory and supervisory framework for alternative investment fund managers (AIFMs). It also finds that most of the provisions remain relevant, have added value to the European Union, have contributed to the achievement of the AIFMD’s specific and operational objectives, and have done so effectively, efficiently and coherently. Of note is the finding that the EU management passport is working well.

However, certain areas were identified as requiring further analysis and improvement, for example:

  1. A lack of transparency regarding differing national rules and supervisory processes relating to the marketing passports, caused by national competent authorities adopting different approaches about which activities are considered as “marketing.” Respondents to the survey have, therefore, observed that it would be of “EU added value” to retain the national private placement regimes, even if non-EU passports were to be introduced for non-EU AIFs and AIFMs;
  2. Excessive investor disclosure requirements, which are often ignored by or prevent investors from obtaining a clear understanding of an AIF’s investment proposal;
  3. Inadequate and duplicative reporting requirements, as well as reporting obligations that overlap with other EU legislation; and
  4. The effectiveness of the valuation rules is impaired due to the binary choice between internal or external valuation and the diverging member states’ interpretations of the extent of the liability of external valuers.

The EC will continue its work on the AIFMD review and will report to co-legislators in 2019.

The EC’s report is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume IX, Number 18



About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629