EUROPE: ESMA publishes opinion on draft RTS on types of AIFMs

Wednesday August 21 2013

The European Securities and Markets Authority has published its opinion on the draft Regulatory Technical Standards (RTS) on types of AIFMs.

On 2 April 2013, ESMA submitted its Final report on draft regulatory technical standards on types of AIFMs (ESMA/2013/413) to the Commission for endorsement. On 8 July 2013, ESMA received a letter from DG MARKT explaining that the Commission’s analysis of the draft RTS indicated that “Article 1(2)(a) of the RTS risks not being fully compatible with the AIFMD” and inviting ESMA to submit new draft RTS to the Commission reflecting the orientations given in the Letter. ESMA had 6 weeks starting from 8 July to respond to the EC’s letter. ESMA submitted its formal opinion to the European Commission on 13 August, with the opinion published on its website on 20th August.

The ESMA opinion presents the arguments supporting the original approach followed by ESMA in Article 1(2)(a) of the draft RTS submitted on 2 April 2013 to the Commission, including on the compatibility of that approach with the AIFMD (Level 1 and 2 provisions), but also submits an amended version of the draft RTS for the Commission’s consideration.

The redrafted RTS attempt to address the concerns expressed in the Letter, reinforcing that the key element for the identification of an open-ended AIF is the existence of repurchases or redemptions of the AIF’s shares or units prior to the commencement of its liquidation phase or wind-down, provided that the repurchases or redemptions happen at the investors’ request. The revised draft also clarifies that certain decreases in the capital of the AIF do not qualify as repurchases or redemptions for the purpose of the definition.

Click on the above link for the revised draft RTS.