On 14 November, the FSA published the first of two planned consultation papers, CP 12/32, on its proposed new rules and guidance for the FSA Handbook to facilitate the transposition of the Alternative Investment Fund Managers Directive (AIFMD) into UK law. HM Treasury intends to consult separately on the necessary changes to legislation.

The European Commission has still not published the level 2 implementing measures for the AIFMD, so in CP 12/32 the FSA is only able to consult on those areas where it considers it has sufficient certainty. These include:

  • the prudential regime which will apply to all types of alternative investment fund managers, dealing with capital requirements, professional negligence risks and the liquid assets requirement and reporting matters;
  • the incorporation of the main Level 1 text requirements into the FSA Handbook, including operating requirements for the alternative investment fund managers, fund managers' duties in relation to the management of funds, transparency obligations towards investors and the FCA;
  • the regime for those firms acting as depositaries of alternative investment funds, which deals with eligibility, the applicable capital requirements for depositaries and the independence requirement.

The paper also proposes transitional provisions which mean that existing UK alternative investment fund managers (AIFMs) at 22 July 2013 will not be required to comply with the provisions of the AIFMD, or become authorised as an AIFM until July 2014.

The UK has until 22 July 2013 to implement the provisions of the AIFMD. A second consultation paper is expected in February 2013, by which time it is hoped the level 2 implementing measures will have been published by the European Commission.