On July 4, the UK Financial Conduct Authority (FCA) published its quarterly consultation paper (Quarterly Consultation), which details proposed amendments to the FCA Handbook. In this Quarterly Consultation, the FCA has proposed to extend and amend UK reporting requirements under the EU Alternative Investment Fund Managers Directive (AIFMD) for certain UK AIFMs and also for non-European Economic Area (EEA)AIFMs that market feeder AIFs in the United Kingdom.
Specifically, the Quarterly Consultation contains the following changes:
- Full-scope UK AIFMs. The FCA has proposed to insert a new section into the “FUND” section of the FCA Handbook which will require full-scope UK AIFMs—that manage but do not market non-EEA AIFs (and/or their respective feeder AIFs) and those that report on a quarterly basis— to report data on those non-EEA AIFs not currently captured by reporting requirements. The FCA has proposed to extend the reporting requirements only to full-scope UK AIFMs that: 1) have a total of €1 billion worth of assets under management; or 2) manage an individual AIF with a total of €500 million worth of assets under management.
- Non-EEA AIFMs. Under current arrangements, non-EEA AIFMs marketing feeder AIFs in the United Kingdom do not need to report on the respective master AIF, unless that master AIF is also marketed in the United Kingdom. Significantly, in the Quarterly Consultation, the FCA has proposed to extend reporting requirements to capture master AIFs as well (even where they are not marketed in the United Kingdom) (which would bring UK reporting more in-line with that in other EU countries). The proposed changes would only apply to master AIFs managed by above threshold non-EEA AIFMs where quarterly reporting is currently required on the feeder AIFs. The FCA notes that this presents an alternative interpretation to the requirements in the EU Alternative Investment Fund Managers Regulations, and that the European Securities and Markets Authority (ESMA) is also considering whether to update current Q&A guidance.
Comments on the proposed changes outlined above must be submitted to the FCA by September 1. A copy of the Quarterly Consultation is available here. The FCA’s accompanying press release is available here.