EUROPE: ESMA publishes guidelines on key concepts of the AIFMD

Tuesday August 13 2013

On 13^thAugust 2013, the European Securities and Markets Authority (ESMA) published its guidelines on key concepts of the AIFMD. The guidelines apply in respect of Article 4(1)(a) of the Directive that contains the definition of ‘AIF’. This definition contains a number of elements noted below that are each addressed separately in the guidelines:

• “collective investment undertaking”
• “raising capital”
• “number of investors”
• “defined investment policy”

ESMA has stipulated that appropriate consideration should be given to the interaction between the individual concepts of the definition of an AIF and has stated that an entity should not be considered an AIF unless all the elements included in the definition of ‘AIFs’ under Article 4(1)(a) of the AIFMD are present. However, competent authorities and market participants should not consider that the absence of all or any one of the characteristics under each of the concepts in the definition of ‘AIF’ in Article 4(1)(a) of the AIFMD (i.e. ‘collective investment undertaking’, ‘raising capital’, ‘number of investors’ and ‘defined investment policy’) conclusively demonstrates that an undertaking does not fall under the relevant concept.

Competent authorities must notify ESMA whether they comply or intend to comply with the guidelines within two months of the date of publication by ESMA. Where authorities do not intend to comply, reasons for non-compliance must be given. In the absence of a response by this deadline, competent authorities will be considered as non-compliant. A template for notifications is available from the ESMA website. AIFMs are not required to report whether they comply with these guidelines.

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