ESMA confirms next steps

The European Securities and Markets Authority (ESMA) is continuing its preparations for the introduction of the Alternative Investment Fund Managers Directive (AIFMD) passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) (the AIFMD third country passport) but it is still unclear when the passport will become a reality. On 11 October 2016, Steven Maijoor, the Chair of ESMA, briefed the European Parliament’s Economic and Monetary Affairs Committee on ESMA’s next steps, which are to:

  • continue its assessment of Bermuda and Cayman Islands with a view to reaching a definitive conclusion on whether to extend the passport to those countries
  • start to assess a third group of non-EU countries, when it has more clarity on the next steps envisaged by the co-legislators
  • focus on putting in place the extensive framework foreseen by the co-legislators in case the passport is indeed extended to one or more non-EU countries.

ESMA notes that this last element includes making preparations for the significant role for ESMA in the functioning of the passporting system and the strengthened supervisory cooperation that will be crucial to its success.

ESMA amends its advice on the AIFMD third country passport

In a separate development, ESMA clarified on 12 September 2016 its Advice from July 2016 on the application of the AIFMD third country passport with respect to the assessment of the Isle of Man. The clarification does not change ESMA’s general advice on the potential extension of the passport to the Isle of Man, namely that it found that the absence of an AIFMD-like regime made it difficult to assess whether the investor protection criterion is met.

The amended advice includes the following clarifications with respect to the assessment of the Isle of Man:

  • the Isle of Man underwent an assessment by the International Monetary Fund (IMF) in 2003 and 2009 as part of the Financial Sector Assessment Program (FSAP) and
  • the self-assessment carried out by the Isle of Man Financial Services Authority in 2013 was an assisted self-assessment.

Please note that the July 2016 Advice is no longer available on ESMA’s site. For further details on ESMA’s recommendations, please see our previous briefing on the July 2016 Advice titled 'Good news for Canada, Guernsey, Japan, Jersey and Switzerland on the long road to the AIFMD third country passport.'