It might soon be possible for alternative investment fund managers (AIFMs) in the United States of America, Hong Kong, Singapore, Japan, Canada, the Isle of Man, the Cayman Islands, Bermuda or Australia (the Countries), to “market” non-EU alternative investment funds (AIFs) to professional investors anywhere in the European Economic Area (EEA), using the “passport” in the Alternative Investment Fund Managers Directive (AIFMD). Until then, AIFMs will be obliged (a) to register with, or become authorised by, the regulators in every relevant EEA country where the potential investors in a particular AIF have their respective registered offices, beforemarketing” begins; and/or (b) to meet the requirements of the “reverse solicitation exemption” instead.

The European Commission has asked the European Securities and Markets Authority (ESMA) to assess each of the Countries, and to give its advice about the availability of the passport to the European Parliament, Council and Commission by 30 June 2016.

ESMA is required to give the Parliament, Council and Commission a positive advice in respect of every Country unless it’s assessment revealed significant investor protection, market disruption, competition, or systemic risk-monitoring, obstacles that would make a positive advice and the availability of the passport inappropriate. If ESMA gives a positive advice in respect of a Country, the Commission must adopt (so called) “delegated acts” which specify when the passport will become available, before giving notice to the Parliament and Council that this is what it’s done. Unless the Parliament or Council objects to the delegated acts, they will published in the Official Journal of the European Union and to come into force within 3 or 4 months of adoption. The passport could therefore be in place before the end of the year.

For anyone who wants the detail, it’s in articles 40, 56, 57, 58, and 67 of the AIFMD, which is available here.  ESMA’s July 2015 advice on the passport is available here.