The new draft of the Investment Funds Act, prepared by the Ministry of Finance, serves to transpose the EU Alternative Investment Funds Management Directive (AIFMD) into the national law. It is expected that the Act will be passed in the spring or summer of 2013.

Pursuant to AIFMD all non-registered investment undertakings ("false" funds) must obtain a license of the financial supervisory authority if the volume of their assets exceeds, depending on circumstances, 100 million or 500 million euros. Smaller undertakings will be subject to reporting obligations.

In Estonia the impact of AIFMD is revealed through the requirements that funds, which are not registered by the financial supervisory authority, must start submitting notices and reports to the Financial Supervision Authority. Such reporting obligation will be limited in scope, and it does not mean that the Financial Supervision Authority will exercise direct regulatory supervision of the unregistered funds. The Estonian legislation contains provisions regulating the application of these requirements, and reports to the Financial Supervision Authority will be submitted once a year.

The Draft Act will introduce a number of other significant amendments to provisions governing investment funds and fund managers, creating more flexible operating conditions, without neglecting protection of consumer rights.