EUROPE: ESMA publishes revised Q and A on AIFMD

Tuesday March 25 2014

The European Securities and Markets Authority has published a revised Questions and Answers document on the application of the Alternative Investment Fund Managers Directive (AIFMD).

The updates concern the reporting requirements to national competent authorities under Articles 3, 24 and 42 of the Directive. A number of new questions have been added as follows:

• The treatment of repurchase transactions at the level of the portfolio of the AIF by or on behalf of a reporting AIF and whether these should be considered as financing operations for the purpose of the AIFMD reporting obligations
• Whether the residual maturity of the instrument or the maturity at issuance period should be used by AIFMs when reporting information on ‘Instruments traded and individual exposures’
• The basis of the numerator for calculating the geographical exposure as a percentage of the NAV of the AIF
• The basis of the numerator and the denominator for calculating the geographical exposure as a percentage of the aggregated value of the AIF
• The basis of the numerator for calculating the breakdown of investment strategies as a percentage of the NAV of the AIF
• The calculation of the percentage of market value for securities traded on regulated markets and OTC markets
• The calculation of the percentage of trade volumes for derivatives traded on regulated markets and OTC markets
• The reporting by AIFMs of the information on the liquidity portfolio when the AIF is invested in assets with no current liquidity for which it is not possible to determine the future liquidity
• Reporting information on investor liquidity
• The treatment of cash resulting from repurchase agreements

AIFMD ANNEX 4 REPORTING

The AIFMD and the AIFMD Level 2 Regulation provided details on the reporting obligations to national competent authorities. In addition, ESMA developed guidelines on reporting obligations to encourage standardisation.

On 1 October 2013, ESMA published its final report along with additional IT guidance, a reporting template and an ESMA opinion on additional data reporting for the monitoring of systemic risk. The opinion provides details of a set of additional information that national regulators could require AIFMs to report on a periodic basis. Some of the requirements will involve firms collecting new data regarding AIF portfolios and performing new calculations on such data.

Funds-Axis will be providing comprehensive Annex 4 reporting, in conjunction with Miles Software. For details contact info@funds-axis.com.

Click on the above link for the revised Q and A.