The European Securities and Markets Authority (ESMA) is about to issue:

  • An opinion on the EU-marketing of alternative investment funds (AIFs), by non-EU fund managers (AIFMs);
  • An advice to the European Parliament, Council and Commission, on the application of the passport to the EU-marketing of AIFs by non-EU AIFMS.

The opinion and advice will reflect ESMA’s view of:

  • The extent to which (for example) non-EU AIFMs have complied with the AIFMD’s reporting; disclosure; and (so called) asset stripping rules, since July 2013;
  • The existence and effectiveness of the co-operation arrangements between the EU’s regulators, and the supervisory authorities in the third-countries where the non-EU AIFMs and non-EU AIFs are established;
  • Any investor protection issues that have arisen since July 2013; and
  • Any third-country regulatory and supervisory framework features that might prevent an EU regulator from carrying out its supervisory functions under the AIFMD.

Readers won’t therefore be surprised to learn that ESMA’s opinion and advice are expected to take a “third-country by third-country” approach, rather than working on “a one size fits all” basis. (See, for example, the speech given by ESMA’s Chair (Steven Maijoor) in November 2014.)

The European Commission will be required to adopt a delegated act within 3 months of receipt of a positive advice and opinion from ESMA; and that act will specify the date when the AIFMD’s third-country passport rules will begin to apply. If the Parliament and Council do not object to the Commission’s delegated act, within 3 months of its issue (or a further 3 months, if the Parliament or Council need more time), it will be published in the Official Journal of the European Union, before coming into force.