EUROPEAN UNION: ESMA publishes updates to Q&A on the application of the AIFMD

Tuesday July 21 2015

The European Securities and Markets Commission (ESMA) has published an updated Q&A on the application of the Alternative Fund Managers Directive (AIFMD). The Q&A includes updated and new questions and answers on reporting to national authorities and the calculation of the total value of AUM.

The new entries and updates in the Q and A document cover the following issues:

Reporting to national competent authorities under Articles 3, 24 and 42

Question: How should AIFMs convert the total value of assets under management into Euro?

Answer: First of all, AIFMs should use the rounded values of the AIFs in the base currency of the AIFs. Then, AIFMs should divide these rounded values by the corresponding value of one Euro into the base currency of the AIFs. For example, if the base currency of an AIF, reporting for the 31 March 2015, is the US dollar and is using the ECB rate, AIFMs should divide the rounded value in US dollar of the AIF by 1.0759 which was the spot rate on that date.

AIFMs should report the rounded values in the base currency and in Euro of the consolidated reporting template for AIFM-specific information and of the consolidated reporting template for AIF-specific information. AIFMs should also report the value of the exchange rate used for the conversion of the consolidated reporting template for AIFM-specific information and of the consolidated reporting template for AIF-specific information.

Question: Should AIFMs include AIFs created during the reporting period in the total value of assets under management of the AIFM for that reporting period?

Answer: Yes. This means that the total value of assets under management at the level of the AIFM at the reporting date will not be the sum of the values of assets under management of the AIFs reported for that reporting period.

Question: When a non-EU AIFM reports information to the national competent authorities of a Member State under Article 42 of the AIFMD, which AIFs have to be included in the reports?

Answer: When a non-EU AIFM reports information to the national competent authorities of a Member State under Article 42, only the AIFs marketed in that Member State have to be taken into account for the purpose of the reporting. When Member States apply ESMA’s opinion on collection of additional information under Article 24(5) of the AIFMD, AIFMs should also report information on non-EU master AIFs not marketed in the EU that have either EU feeder AIFs or non-EU feeder AIFs marketed in the Union under Article 42.

Calculation of the total value of assets under management

Question: Should AIFMs include short non-derivative positions for the calculation of the total value of assets under management?

Answer: Yes. According to Article 2(1)(b) of the implementing Regulation, AIFMs should include assets acquired through leverage. Where a short sale occurs with assets being received, AIFMs should include the assets received in the calculation of the total value of assets under management.

Click on the above link for further details.