The FMLC has published an issues paper that looks at the legal uncertainties the current compromise draft of the AIFMD creates. It notes many problems, but lists five major concerns:
- scope and definitions of central concepts, specifically "Alternative Investment Fund" and "Alternative Investment Fund Manager", and uncertainty as to the activities which should be regulated activities for the purposes of the Directive;
- the liability regime for depositaries;
- the difficulty of interpreting the depositary's obligation to verify whether the AIF or the AIFM has ownership of all other assets in which the AIF invests and the practical problems of meeting this requirement;
- the delegation restriction on depositaries and the potential inadvertent effects of it; and
- the inconsistencies and inherent conflicts between the proposal and existing financial services directives which create legal uncertainty as to the general application of Community legislation.