The Alternative Investment Management Association (Aima) has made public its concerns surrounding the potential impact of the European Securities and Markets Authority’s (Esma) proposal – the Alternative Investment Fund Managers Directive (AIFMD) on non-EU managers and funds.
ESMA is responsible for giving advice on specific rules and regulation that will in turn enable the AIFMD to be implemented within the on-going ‘level 2’ process.
According to Aima, the latest proposals go beyond requirements, and what was
originally permitted in the ‘level 1’ legislation ruled by the European Council, the European Commission and Members of the European Parliament last year.
The AIFMD is set to come into effect in July 2013. Aima states if the proposal is enacted, it could have the practical effect of preventing EU investors from investing in non-EU hedge funds such as those managed from the US, Canada, Hong Kong, Singapore, Australia and Switzerland, and that the ruling would cause difficulties for EU managers to delegate portfolio management to third country asset managers.
Andrew Baker, chief executive officer of Aima, says, “The practical implication of the proposals is that some investments into non-EU jurisdictions would become very difficult, if not impossible. Furthermore, it is difficult to imagine how the equivalence of dozens of jurisdictions could be assessed within the implementation deadline. In some parts of the proposal it’s not even clear who would be responsible for such an assessment.”