The European Securities and Markets Authority (ESMA) has published an updated version of its Q&A paper on the application of the Alternative Investment Fund Managers Directive (AIFMD). This publication was released on 12 May 2015, with the new Q&As appearing in Sections III and VII of the document. These sections deal with reporting to national competent authorities under Articles 3, 24 and 42 as well as the calculation of leverage.

Additional Q&As cover the following points:

Reporting

  • Sister companies owned by separate AIFMs should each separately report to the competent authorities of the home member state.
  • Actual drawdowns and not commitments for AIFs pursuing private equity strategies should be included when reporting on subscriptions.
  • Registered AIFMs that decide to opt in under the Directive must comply with it in its entirety. As such, they have to report to their national competent authorities the information required under Article 24 of directive. Note, this does not impact reporting frequency which will continue on an annual basis.
  • Non-EU sub-threshold AIFMs marketing under NPPR should report to each national competent authority where they market their AIFs in regards to the information listed in Article 3(3)(d).
  • Where AIFs investing exclusively in assets denominated in base currency of the AIF, the AIFM should report the long and short positions of the base currency of the AIF with respect to questions 128-130 of the consolidated reporting template.
  • AIFMs need not consider distribution of dividends to investors as redemptions for the purpose of questions 267 to 278 of the consolidated reporting template.
  • AIFMs do not need to apply the same reporting frequency to AIFs that are sub-funds of the same umbrella AIF, each should be treated separately for reporting purposes.
  • AIFMs should take into account cash and cash equivalents for the purpose of the main instruments in which the AIF is trading, the principal exposures of the AIF and the five most important portfolio concentrations as per the relevant questions in the consolidated reporting template.
  • The procedure for first reporting on AIFs is the same as for the first reporting on AIFMs.

Calculation of leverage

  • When AIFMs are calculating their exposure under the commitment approach pursuant to Article 8 of the Implementing Regulation, they should take into account the absolutes value of all the positions of their AIFs valued in accordance with Article 19 of the AIFMD and the criteria laid down in para-graphs 2 to 9 of Article 8 of the Implementing Regulation. For derivative instruments, as required under Article 8(2)(a), AIFMs should convert each position into an equivalent position in the underlying assets using the methodologies set out in Article 10 (which refers to Annex II of the implementing Regulation) and points (4) to (9) and (14) in Annex I of the implementing Regulation.