On 1 August 2013 the European Securities and Markets Authority (“ESMA”) published an opinion proposing practical arrangements in circum stances where Member States have failed to transpose the Alternative Investment Fund Managers Directive (the “Directive”) by the transposition deadline of 22 July 2013.

In order to reduce the impact of the la te transposition of the Directive on industry and investors, particularly for Member States which have already implemented the Directive in full, ESMA has provided for practical arrangements at operational level in relation to the rights of an EU alternative investment fund manager (“AIFM”) to market and manage an EU alternative investment fund (“EU AIF”) where one of the Member States involved has yet to transpose the Directive.

Practical Arrangements

ESMA has provided practical guidance in respect of two scenarios:

The notification of marketing of an EU AIF, by an AIFM located in a Member State that has transposed the Directive, to the competent authority of a host Member State which has not transposed the Directive (Articles 31 and 32 of the Directive).

ESMA is of the view that if the home Member State of the AIFM has transposed the Directive, the competent authority of the host Member State may not refuse a valid notification under the Directive on the grounds that the Directive has not yet been transposed into the laws of the host Member State. This applies irrespective of whether the marketing is done using the freedom to provide services or by means of a branch.

The Management Passport (Article 33 of the Directive).

ESMA is of the view that an AIFM established in a Member State that has transposed the Directive should be able to manage an EU AIF in a Member State where the Directive has not yet been transposed, provided the AIFM is authorised to manage that type of EU AIF in accordance with Article 33(1) of the Directive and has exercised its relevant passport rights. Importantly, ESMA states that any local restrictions on an AIFM that are not in accordance with the Directive will need to be disapplied.

Further Information

The link to the full ESMA opinion proposing these practical arr angements to address the issues associated with the late transposition of the Directive is set out below: