Treasury has published response papers to its two consultations on implementing the AIFMD and revised secondary legislation. Key points and changes include:

  • the Government will no longer impose any new requirements on sub-threshold managers of authorised funds. It had proposed to apply Directive standards to all sub-threshold managers of Non-UCITS Retail Schemes (NURS) and Qualified Investor Schemes (QIS) to avoid a two-tier effect. But respondents said this would be costly and investors are already well protected;
  • the Government does not plan to amend its proposals in respect of requirements for managers of non-collective investment scheme (non-CIS) alternative investment funds (AIFs), whether the AIF is internally or externally managed. It will introduce a registration-only scheme for sub-threshold managers of property funds but will also require there to be an authorised operator (to mirror the current practice). Similarly, the Government will continue with its plans to maintain a status quo for managers of unregulated collective investment schemes;
  • no change to the proposal for overlapping definitions of AIF and CIS, and new activities of managing an AIF and managing a UCITS. Respondents had asked for separate and mutually exclusive definitions but the Government says this is not possible within the timescales for implementation; respondents were divided on whether ancillary activities should be part of the regulated activity of managing an AIF but most felt it a good idea and thought it would simplify permissions, so the Government will proceed with its plans;
  • no change to the plans for including common investment funds and common deposit funds within the definition of AIF, and amendment of charities law so EEA charities can invest in these funds;
  • carrying forward the proposals to create a single gateway for non-UK fund managers to market funds to retail investors in the UK subject to compliance with UK retail investor rules, which Treasury will assess on a case-by-case basis; and
  • confirmation the Government will not apply the approved persons regime to internally managed funds.

Treasury also confirmed that UK AIFMs that will not be managing AIFS after 21 July 2014 will not need to apply for authorisation and that during the transitional year the depositary of an authorised AIFM need not have the new required Part 4A permission. It also published some additional FAQs confirming various aspects of operation during the transitional period. (Source: Treasury Responds on AIFMD Implementation and Treasury Responds on Further AIFMD Consultation)