ITALY: Implementation of AIFMD by Consob and Bank of Italy

Monday February 9 2015

The Italian securities regulators Consob and the Bank of Italy have approved the amendments to the regulations necessary to transpose European Directive 2011/61/EU on Alternative Investment Fund Managers (“AIFMD”).

Consob has amended the regulations for intermediaries and issuers (Resolution No. 19094 of 8 January 2015) and the joint Bank of Italy – Consob Regulations on the organisation and control of intermediaries providing investment and collective management services, issued under the terms of Article 6, Section 2-bis of the Consolidated Law on Finance – CLF (Measure of 19 January 2015).

In the regulations for intermediaries the approach chosen, and then followed also for the joint regulation, was to identify a single regulatory corpus applicable to the entire sector of collective investment management. Certain specific features that the management of UCITS (Undertakings for Collective Investment in Transferable Securities) funds presents with respect to the management of AIFs (Alternative Investment Funds) were however safeguarded.

No exceptions were provided for to the general rules to the advantage of so-called sub-threshold managers (subjects for which the total value of assets under management does not exceed 100 mln euro or 500 mln if the UCITS – Undertakings for Collective Investment in Transferable Securities – managed by them do not make use of leverage and do not allow investors to exercise the right of redemption for five years after the initial investment). This was done on the basis of the fact that the general rules of conduct lay down guidance for behavioural correctness for any professional manager.

For the issuers` regulations, the changes resolved are aimed at:

– defining the procedure that Italian and foreign managers are required to follow for national and cross-border marketing of AIFs, be they reserved for professional investors or for retail investors;

– enumerating the disclosure obligations towards the investors. In this regard, with reference to professional investors, Annex 1-bis defines the minimum information set to be given before the investment is concluded. Instead, as regards information to be provided to retail investors, in the event of subscription of open-end AIFs, the current regulations are confirmed which provide for the obligation of drafting the document with the key information for investors (KIID) and the prospectus, while in the case of closed-end AIFs, the provisions issued in implementation of the EU Directive regarding prospectuses (2003/71/EC) apply;

– implementing the new rules of the CLF related to obligations of FIA managers who acquire significant and controlling equity investments in unlisted companies or in listed issuers.

In the case of the joint Consob – Bank of Italy regulations on the organisation and control of intermediaries providing investment and collective management services, further simplifications were introduced with reference to sub-threshold managers. In some cases, in fact, an opportune graduation of the obligations applicable has been provided for, depending on a) the dimensions of the manager intermediary and b) the breadth of its operations, under the terms of Article 35-undecies of the CLF. All this in accordance with the proportionality principle with reference to the organisational and procedural nature of the necessary changes.

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