On 19 December 2012, the European Commission published a regulation (the “Regulation”) providing Level 2 guidance on the Alternative Investment Fund Managers Directive (the “AIFMD”).

The implementing measures set out in the Regulation are significantly different to the Technical Advice published by the European Securities and Markets Authority (“ESMA”) on 16 November 2011, as had been expected, but also go further than had been indicated in drafts of the Regulation circulated prior to the final version being agreed.

The main areas covered by the Regulation are as follows:

  • conditions and procedure for the determination and authorisation of alternative investment fund managers (“AIFMs”), including how to calculate assets under management and capital requirements applicable to AIFMs;
  • operating conditions for AIFMs, including rules on remuneration, conflicts of interest, risk management, liquidity management, investment in securitisation positions and organisational requirements;
  • rules on valuation;
  • conditions for delegation;
  • rules on depositaries, including their duties and liabilities;
  • reporting requirements and how to calculate leverage; and
  • exchange of information and cooperation agreements.

The Regulation is subject to a three month scrutiny period. Provided that neither the European Parliament nor the European Council opposes the Regulation, it will enter into force at the end of this period and the day following publication in the Official Journal.

ESMA Consultation Papers

The Regulation provides an essential level of detail supplementing the provisions of the AIFMD itself that is necessary in order to permit the investment funds industry to begin to plan for the implementation of the AIFMD. However, there are still areas that remain unclear and/or are problematic.

To address some of these gaps, ESMA published, also on 19 December 2012, two consultation papers:

  1. “Guidelines on key concepts of the AIFMD”, which aims to clarify which entities fall within the scope of the AIFMD; and
  2. (ii) “Draft regulatory technical standards on types of AIFMs”, which aims to distinguish between managers that will manage open- and closed-ended alternative investment funds.

The closing date for responses to both consultation papers is 1 February 2013.

Further Information

A link to the Commission Regulation is set out below:


A link to the ESMA consultation paper on “Guidelines on key concepts of the AIFMD” is set out below:


A link to the ESMA consultation paper on “Draft regulatory technical standards on types of AIFMs” is set out below: