Today, 22 July, is the end of the transitional period provided for in the Alternative Investment Fund Managers Directive (AIFMD). AIFMD regulates Alternative Investment Fund Managers (AIFMs) who manage Alternative Investment Funds (AIFs). An AIF is a collective investment undertaking (other than a UCITS) which raises capital from a number of investors with a view to investing it in accordance with a defined investment policy for the benefit of a number of investors.
AIFMD is relevant for hedge funds, private equity funds, infrastructure funds, commodity funds, exempt unit trusts, and REITs among others (with some exemptions). Holding companies and certain securitisation Special Purpose Vehicles (SPVs) are outside the scope of the AIFMD. The AIFMD catches AIFMs established in the EU which manage one or more AIFs wherever the AIFs are located, and catches AIFMs established outside the EU which manage one or more AIF established in the EU or which market one or more (EU or non-EU) AIF in the EU.
On 22 July 2013, the AIFMD went "live" and the AIFMD passport regime became effective. The transitional period which expires today enabled EEA AIFMs time to comply with the new regime and enabled non-EU AIFMs to market AIFs without being subject to the requirements deriving from AIFMD. This was particularly necessary as many of the requirements have evolved and become clearer in the course of the last year.
Some EEA member states have still not yet implemented AIFMD. Many concerns and uncertainties remain. The details of the regime are still unfolding (as an example, ESMA issued an updated Q&A on the application of the AIFMD, with 24 updated questions only yesterday). Europe-wide, authorised AIFMs are now grappling with the reporting requirements as finer points are clarified and it is likely that this area will require significant fine tuning.
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 avail of an alternative category of depositary service. Ireland was among the first European jurisdictions to fully implement the AIFMD. In turn, the Central Bank assisted industry in planning for AIFMD and while the AIFMD landscape continues to evolve has issued
- AIF Rulebook. The AIF Rulebook is the Central Bank’s rulebook in relation to AIFs. It contains chapters concerning Retail Investor AIFs (RIAIFs), Qualifying Investor AIFs (QIAIFs), AIF Management Companies, AIF Fund Administrators, AIFMs and AIF Depositaries.
- AIFMD Q&A and Guidance. The Central Bank recently published a 9th edition of its AIFMD Q&A document, which it continually updates. The Central Bank also issued a series of AIFMD guidance documents. These AIFMD guidance documents 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, inward marketing, third party approval and fund authorisation as regards investment managers/ investment advisers and so on.
- Central Bank Application Forms. The Central Bank publishes application forms on its website to be used by AIFMs and AIFs seeking authorisation or registration pursuant to the AIFMD. These give detail on the requirements and include the application form for authorisation as an AIFM, application form for registration as an AIFM, AIF application forms and post authorisation application forms.
- The Central Bank has issued guidance and forms relating to the marketing of AIF to professional investors in Ireland.
- AIFM Register. Details in relation to AIFMs authorised or registered by the Central Bank of Ireland are available from the Central Bank website. This information is updated on a monthly basis. As at 27 Jun 2014, the Central Bank had registered 33 Authorised and Registered AIFMs and 48 AIFM branches operating in Ireland and AIFMs providing services & activities in Ireland on a cross-border basis.
The timely implementation of AIFMD in Ireland and the pro-active and constructive approach of industry and of the Central Bank has enabled Irish AIFMs to take full advantage of the AIFMD regime.