The Alternative Investment Management Association (AIMA) has warned that the European Commission’s draft directive on Alternative Investment Fund Managers would hit fund managers and investors around the world if enacted into European law in its present form.

AIMA argues that the Directive creates potentially major difficulties for non-EU funds and/or non-EU managers in accessing the EU market. Marketing of funds by managers will be allowed only with a special marketing passport that the Directive creates. However the Directive also delays its introduction by three years and imposes significant obstacles (such as demonstrating regulatory and tax equivalence) to obtaining it.

AIMA suggests that the Directive makes it so difficult and costly for non-EU funds and managers to access the EU market that it is clearly protectionist in effect, if not in intent. Investors will face loss of choice, increased costs and diminished returns.

Andrew Baker, CEO of AIMA, said, “We believe that the provisions of the draft Directive with protectionist consequences will not only hit the industry worldwide but weaken the competitiveness of the EU in investment management and make the EU a less attractive destination for international investment. Naturally, we hope that it can be revised to avoid this.”

View AIMA warns of global impact of EU AIFM Directive, 28 July 2009