The Alternative Investment Fund Managers Directive (2011/61/EU) (the "AIFM Directive") provides a new legal framework for both alternative investment funds (AIFs) and their managers (AIFMs). Directive 2011/61/EU is a framework or "Level 1" directive, requiring further implementing measures. On 19 December 2012 the European Commission adopted a delegated regulation supplementing the AIFM Directive (2011/61/EU) (the "Regulation"). The Regulation provides detailed implementing rules for the AIFM Directive. Once into force, the Regulation will have direct application throughout the European Union, without the need for transposition into national law.

The Regulation addresses the following topics:  

  • conditions and procedures for the determination and authorisation of AIFMs, including the applicable capital requirements;
  • general operating conditions for AIFMs, including rules on remuneration, transparency, conflicts of interest, risk management, liquidity management, investments in securitisation positions, organisational requirements and rules on valuation;
  • rules on delegation;
  • provisions relating to the depositary, including the role and responsibility of the depositary;
  • reporting obligations and leverage calculation; and
  • rules on cooperation arrangements between European regulators and non-EU regulators.  

The Regulation is subject to a three-month review period by the European Parliament and the Council. During that term, each of them has the right to object to the entire Regulation, but they can no longer propose amendments. Assuming that no such objections are made, the Regulation will enter into force on 22 July 2013.