In our newsletter of 11 March 2014, we discussed the implementation of the AIFM directive (Alternative Investment Fund Management Directive, 2011/61/EU) in Finland and the entry into force of the implementing Act on Alternative Investment Fund Managers (Fi: laki vaihtoehtorahastojen hoitajista, 162/2014, the AFMA) on 15 March 2014. The AFMA has been complemented by a number of decrees and regulations of the Finnish Financial Supervisory Authority (FIN-FSA). Some of these regulations are still due to come into force on 22 July 2014, which is the general deadline for compliance with the directive.
As noted in our newsletter, alternative investment fund managers (AIFMs) which have commenced the marketing of alternative investment funds (AIFs) prior to 15 March 2014 have been able, through a notification to the FIN-FSA, to take advantage of a grandfathering regime allowing them to continue the marketing of these AIFs until the July deadline without fulfilling all of the obligations set out in the AFMA. However, as of the July deadline (at the latest), AIFMs must fulfil all the requirements of the AFMA, leaving roughly one month to complete any necessary preparations. The exemptions available under the grandfathering regime will no longer be available. For example, the AFMA sets certain reporting and disclosure duties, the scopes of which depend on, among other things, the home place of the AIFM and that of the AIF (if different) as well as the characteristics and assets under the management of the respective AIFM. Additionally, as of the July deadline, the marketing of AIFs requires either a proper notification directly to the FIN-FSA or passporting into Finland through the home member state authority in accordance with the AIFM Directive.
Preparing for the Expiry of the Transitional Period
- Finnish AIFMs that wish to manage AIFs in Finland must apply for a licence from the FIN-FSA at the latest by the July deadline. Smaller AIFMs, which are not required to have a licence, need to register with the FIN-FSA by the same date. Additionally, EEA AIFMs that wish to continue managing of AIFs in Finland must, by the July deadline, passport their licence into Finland in accordance with the AIFM directive. If the above measures have not been taken by the July deadline, the activities subject to AFMA regulation must be ceased by the July deadline at the latest.
- AIFMs that wish to market AIFs to professional clients in Finland (the AFMA also allows marketing to non-professional clients under certain circumstances) must either submit a notification to the FIN-FSA or passport the AIFs into Finland:
Finnish AIFMs: a marketing notification regarding Finnish AIFs and EEA AIFs must be submitted to the FIN-FSA. Marketing may be commenced once the AIFM has received an acknowledgement thereof from the FIN-FSA.
- For EEA AIFMs, there is a passporting regime available with respect to EEA AIFs. Marketing of EEA AIFs passported to Finland may be commenced once the EEA AIFM has received a notification thereof from its local supervisory authority. However, with respect of non-EEA AIFs, these AIFs may be marketed in Finland subject to a notification to the FIN-FSA and their marketing may be commenced once the AIFM has received an acknowledgement thereof from the FIN-FSA.
- Non-EEA AIFMs: a marketing notification regarding both EEA AIFs and non-EEA AIFs shall be submitted to the FIN-FSA. Marketing may be commenced once the AIFM has received an acknowledgement thereof from the FIN-FSA.
As noted in our previous newsletter, it has been possible to seek a ruling from the FIN-FSA in respect of the applicability or non-applicability of the AFMA to a specified case. While the statutory deadline for applications regarding existing business expired on 22 April 2014, it is still possible to seek such a ruling in respect of a new venture (i.e. the activities have commenced after 15 March 2014). We have completed a number of such applications for rulings, and we have been in continuous contact with the regulators during the implementation process in general. Our impression is that many key concepts of the AFMA are finally finding their appropriate place in the Finnish regime.