From 22 July 2013, the Alternative Investment Fund Managers Directive (AIFMD) is "live" and the AIFMD passport regime is now effective. The Central Bank of Ireland (Central Bank) has been accepting applications for the authorisation of Alternative Investment Managers (AIFMs) under the AIFMD since May of 2013. This has ensured that Irish AIFMs are ideally positioned to gain full advantage of the EU wide AIFMD marketing passport from the earliest opportunity. The Central Bank has further assisted industry in planning for AIFMD through its roll-out of draft requirements, forms and documentation and through holding workshops with industry. Moreover, Ireland was among the first European jurisdictions to fully implement the AIFMD. The AIFMD landscape will continue to evolve as guidelines and standards are finalised, national policy is clarified and we see how principles of proportionality are implemented in practice. However we can say that much of the detail of the AIFMD regime has become clear at this stage.
Ireland transposed the AIFMD into national law on 16 July 2013 by virtue of the European Union (Alternative Investment Fund Managers) Regulations, 2013 (S.I. No. 257 of 2013) (the AIFM Regulations). The AIFM Regulations transpose the AIFMD without gold plating (so that additional requirements over and above AIFMD have not been imposed). Moreover, Ireland has availed of the discretions available to it under AIFMD so that, for example, AIFMs are permitted to market to retail investors and AIFs with no redemption rights within the first five years may use an alternative category of depositary.
The Central Bank published the final AIF Rulebook . The AIF Rulebook is the Central Bank’s rulebook in relation to Alternative Investment Funds (AIFs). It contains chapters concerning Retail Investor AIFs (RIAIFs), Qualifying Investor AIFs (QIAIFs), AIF Management Companies, Fund Administrators, AIFMs and AIF Depositaries.
AIFMD Q&A and Guidance
The Central Bank published a 3rd edition of its AIFMD Q&A document. This edition has amendments to questions 1, 7, 22, 24, 44, 45, 46 and 47 as well as new questions numbered 56 to 59. The Central Bank also issued a series of AIFMD guidance documents. These AIFMD guidance documents reflect the guidance which was contained in Draft 2 of the AIF Handbook. They cover a wide variety of topics such as AIF authorisation, AIF depositaries, AIFM applications, amalgamations of AIFs, valuations, closed-ended AIFs, open-ended AIFs with limited liquidity, reporting, outsourcing of fund administration, inward marketing, specific requirements for RIAIFs, grandfathering rules for existing professional investor funds (PIFs), redemption frequency, risk spreading, subsidiaries, rules for QIAIFs which invest more than 50% of net assets in another investment fund, risk spreading for QIAIFs, short- term MMFs for RIAIFs and QIAIFs and amortised cost valuation, subscriptions into QIAIFs, and third party approval and fund authorisation as regards investment managers/ investment advisers.
Central Bank Application Forms
The Central Bank has published finalised application forms on its website to be used by AIFMs and AIFs seeking authorisation or registration pursuant to the AIFMD. These include its application form for authorisation as an AIFM, application form for registration as an AIFM, QIAIF application forms, RIAIF application forms and post authorisation application forms. The final versions of the application forms do not differ significantly from the earlier drafts which were circulated.
Central Bank consultation on types of AIF under AIFMD
The Central Bank also published a consultation paper (CP68) on types of AIF under AIFMD including Unit Trusts, Exempt Unit Trusts, REITs etc. The consultation closes on 11 October, 2013.
Other AIFMD materials (which you may find useful)
- Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD)
- AIFMD level 2 Regulation; Regulation 231/2013 supplementing AIFMD with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision.
- Commission Regulation (EU) No 448/2013 establishing a procedure for determining the Member State of reference of a non-EU AIFM.
- Commission Regulation (EU) No 447/2013 establishing the procedure for AIFMs which choose to opt in under AIFMD.
- ESMA Guidelines on sound remuneration policies under the AIFM. On 3 July 2013 ESMA published the various translations of these guidelines. These guidelines apply from 22 July 2013, subject to the transitional provisions of the AIFMD. The Central Bank conforms to all ESMA guidelines unless there is specific reason, identified prior to the effective date, not to do so.
- Draft Regulatory Technical Standards on types of AIFMs; ESMA received a letter from the European Commission (EC) on 8 July, 2013 in response to its draft regulatory technical standards in its Final report - Draft Regulatory Technical Standards on types of AIFMs, which was submitted to the EC on 2 April, 2013. The EC disagrees with the ESMA definition of open-ended and closed-ended AIFs and accordingly ESMA has 6 weeks starting from 8 July, to respond to the EC’s letter.
- ESMA Guidelines on key concepts of the AIFMD
- ESMA consultation on guidelines on reporting obligations under Article 3 and Article 24 of the AIFMD. This consultation has closed but guidelines have not yet issued.
- ESMA work on AIFMD co-operation agreements. ESMA has increased the list of Memoranda of Understanding (MoU) for AIFMD co-operation agreements from 31 to 38, to include Bahamas, Japan, Malaysia, Mexico and the CFTC in the US. ESMA has also published Guidelines on the model MoU concerning consultation, cooperation and the exchange of information related to the supervision of AIFMD entities.
- EC questions and answers about AIFMD; (this currently provides answers to questions previously asked, but new questions may also be submitted).