On May 30, 2013, the European Securities and Markets Authority (“ESMA”) announced that it had approved cooperation agreements between EU securities regulators and 34 non-European Union (“EU”) regulators, including the SEC, as required by the Directive on Alternative Investment Fund Managers (the “Directive”) and the AIFMD Delegated Regulations (the “Level 2 Regulations”) in order for non-EU alternative investment fund managers (“AIF Managers”) to manage or market alternative investment funds (“AIFs”) in the EU after July 22, 2013.

In short, the Directive established a new regulatory framework for the authorization and supervision of AIF Managers that conduct business in the EU. The Directive allows AIF Managers to manage AIFs, including private equity funds and hedge funds, in the EU and market AIFs in the EU to “professional investors,” subject to compliance with the conditions set forth in the Directive. See the December 17, 2010 Investment Management Regulatory Update for a detailed discussion on the Directive. The Level 2 Regulations are an extensive set of implementing measures that provide details on the framework established by the Directive. As with the Directive, the Level 2 Regulations may apply to EU AIF Managers and non-EU AIF Managers that manage or market one or more AIFs in the EU. Please see the February 27, 2013 Investment Management Regulatory Update for a detailed discussion of the Level 2 Regulations. For a detailed discussion of the specific effects of the Directive and the Level 2 Regulations on non-EU AIF Managers seeking to market non-EU AIFs to EU investors (including a discussion of the United Kingdom’s implementing regulations that provide for a one year transitional period), please see the June 4, 2013 Davis Polk Client Memorandum, The Impact of the Alternative Investment Fund Managers Directive on Non-E.U. Managers of Non-E.U. Funds.

According to ESMA’s press release, ESMA negotiated the cooperation agreements on behalf of the regulatory authorities for each member state of the EU (each, an “EU Member State”) as well as the regulators for Croatia, Iceland, Liechtenstein and Norway (together with the regulators of the EU Member States, the “EU Regulators”). According to ESMA, while it negotiated the cooperation agreements on behalf of the EU Regulators and has approved the cooperation agreements, each EU Regulator must sign a cooperation agreement with each non-EU regulator with which it intends to have a such an arrangement. According to ESMA’s press release, the cooperation agreements approved by it will be publicly available on its website “in due course.”