We wrote about the progress of legislation concerning alternative investment fund managers on 10 September 2013. The Act on Alternative Investment Fund Managers (Fi: laki vaihtoehtorahastojen hoitajista) has been approved and will enter into force on 15 March 2014. The new act is based on the AIFM directive (Alternative Investment Fund Management Directive, 2011/61/EU) and imposes numerous obligations on managers of alternative investment funds (AIFs) marketed to professional investors. The act also permits the marketing of AIFs to non-professional investors, but this in practice always requires a licence.
The regulations required by the AIFM directive are also partially being implemented through eleven decrees of the Ministry of Finance and one government decree. The ministry has proposed that the decrees could enter into force on 29 March 2014.
The new legislation includes key transitional provisions, which should be taken into account by parties conducting relevant activities:
- If a Finnish or foreign AIF has been marketed to professional investors before the act enters into force, this marketing can be continued without a licence until 22 July 2014. However, a notification thereof must be delivered to the Finnish Financial Supervisory Authority (the Finnish FSA) within one month from the act's entry into force, i.e. by 15 April 2014.
- The management of closed-ended funds can also be continued without a licence, but also requires that a notification be made to the Finnish FSA within the same one-month deadline.
- The practical application of the new legislation in Finland remains unclear in many respects. An application can be made to the Finnish FSA for a binding decision on the application of the act. Such applications must be filed by 22 April 2014.
- Once the act has entered into force, management of AIFs will require a licence granted by the Finnish FSA (subject to certain exemptions) or, if the thresholds set in the act are not exceeded, registration with the Finnish FSA. Alternative investment fund managers (AIFMs) must be able to show that they have taken sufficient compliance measures provided for in the act. It is advisable to apply for a licence or register with the Finnish FSA in good time, but no later than on 22 July 2014. If the application has not been filed by this deadline, the activities must be ceased by that date at the latest.
- The act provides for a passporting procedure, which will allow EEA AIFMs to market their shares in the EEA AIFs they manage in Finland without establishing a subsidiary or branch in Finland provided that they have received a notification of marketing permission from the supervisory authority of their home country. If shares in AIFs are marketed only to professional investors, the Finnish FSA must also be provided with information on the measures taken to prevent marketing to non-professional clients.