After much anticipation, the European Securities and Markets Authority (ESMA) has published further advice in relation to the application of the EU Alternative Investment Fund Managers Directive (AIFMD) passport to non-EU alternative investment managers (AIFMs) and alternative investment funds (AIFs) in 12 countries.

ESMA concluded that there are no significant obstacles impeding the application of the AIFMD passport to Jersey, which is one of only five jurisdictions to achieve an unqualified assessment.

At present, non-EU AIFMs and AIFs must comply with each EU country's national regime when they market funds in that country. The extension of the AIFMD passport regime – which at present is available only to EU entities – would allow Channel Islands managers and managers of Channel Islands funds to seek a passport under the AIFMD and thus market and manage throughout the European Union.

This advice follows ESMA's initial recommendation in July 2015 that Jersey should be granted an AIFMD passport and will now be considered by the European Commission, Parliament and Council (the 'EU institutions'). In principle, the commission should, within three months of publication of positive advice from ESMA, adopt a delegated act specifying the date on which the AIFMD passport will be extended to non-EU AIFMs and AIFs. However, the advice notes that the EU institutions may wish to consider waiting until ESMA has delivered positive advice on a sufficient number of non-EU countries before adopting a delegated act, taking into account, among other factors, the potential impact on the market that a decision to extend the passport might have.

The immediate advantage of the AIFMD passport is that, once received, it will allow Jersey funds (and funds managed by Jersey managers) to be marketed to professional investors throughout the European Union on the basis of a regulator-to-regulator notification system, subject to full compliance with the AIFMD.

Channel Islands funds managed in the Channel Islands or otherwise outside of the European Union (and non-EU funds managed by Channel Islands managers) will be able to market in the European Union via national private placement regimes (subject to domestic legislation of the EU member states) until at least 2018, meaning that they need only comply with AIFMD reporting and disclosure requirements until such time as AIFMD passports become mandatory.

For further information on this topic please contact Niamh Lalor at Ogier's Jersey office by telephone (+44 1534 514 000) or email ([email protected]). Alternatively, contact Bryon Rees at Ogier's Guernsey office by telephone (+44 1481 721 672) or email ([email protected]). The Ogier website can be accessed at