The European Commission (the “Commission”) has published responses to a series of questions received in respect of the Alternative Investment Fund Managers Directive (“AIFMD”). The questions and corresponding answers from the Commission can be viewed here. Questions on the transitional sections of AIFMD are responded to, and the wider range of matters including delegation, remuneration, valuation and passporting are also the subject of interpretative responses from the Commission.

Transitional provisions

As per the text of the AIFMD, the Commission acknowledges existing AIFM's legally binding obligation to apply for authorisation under AIFMD during the one year period commencing on 22 July 2013 (the “Transitional Period”). However, in respect of other substantive requirements contained in the AIFMD (such as the general principles, operating conditions, organisational requirements, conflicts of interests, remuneration, risk management, liquidity management rules, securitisation rules, valuation, delegation, depositary rules and reporting requirements), the Commission states that an AIFM which exists at the date of entry into force of the AIFMD shall, during the Transitional Period, take all necessary measures (the language of the Commission here includes “expend its best efforts”) to comply with the AIFMD in respect of the relevant activities undertaken subsequent to 22 July 2013. The Commission goes on to state however that, after the Transitional Period, all of the obligations arising under the AIFMD are legally binding.

The Commission does not offer any clarification on the meaning of a “best efforts” basis and how this might contrast with a legally binding obligation that arises at the end of the Transitional Period. In a response regarding transitional provisions and reporting requirements, whilst the Commission comments that compliance has to be ensured on a best efforts basis, it states that reporting or other obligations do not depend on having obtained an authorisation and that “in general” existing AIFs will be expected to start reporting as of the date of the application of the AIFMD in accordance with the reporting frequencies foreseen in Level 1 and Level 2 rules. With respect to the possibility of transitional provisions for depositaries, in the context of one of the queries raised on the depositary requirements, the Commission states that no specific transitional provisions for depositaries are foreseen.

Comments

The Commission has issued answers to 67 questions with respect to the application and operation of the AIFMD. We have reviewed in detail the content of these answers individually, and would be happy to speak with you regarding the specific queries which you may have.  It is also worth noting that through its responses, the Commission has taken the opportunity to encourage ESMA to provide further guidance on certain issues, such as the alignment of dates of delivery of information under the reporting requirements.

We would also draw your attention in this note to the publication of the Commission's Delegated Regulation on AIFMD in the Official Journal of the European Union (the “OJ”) on 22 March 2013. This triggers article 117 of the Delegated Regulation which provides for entry into force on the twentieth day following publication in the OJ, with application from 22 July 2013..