Thursday August 6 2015

News Source: Fund Regulation

Focus: AIFMD

Type: General

Country: European Union




On 30 July 2015, the European Securities and Markets Authority (ESMA) issued their advice to the European Parliament, the Council and the Commission on the application of the AIFMD passport to non-EU AIFMS and AIFs.

In accordance with Articles 36 and 42 of the Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD), non-EU alternative investment fund managers (AIFMs) and non-EU alternative investment funds (AIFs) managed by EU AIFMs are subject to the national private placement regime (NPPR) of each of the Member States where the AIFs are marketed or managed.

However, the AIFMD makes provisions for the passport, which is currently reserved to EU AIFMs and AIFs, to be potentially extended in future. Article 67(1) of the AIFMD establishes that, by 22 July 2015, ESMA shall issue to the European Parliament, the Council and the Commission advice on the application of the passport to non-EU AIFMs and AIFs in accordance with the rules set out in Article 35 and 37 to 41 of the AIFMD.

ESMA has set out advice on the application of the passport to the following six non-EU countries: Guernsey, Hong Kong, Jersey, Switzerland, Singapore and the United States.

Contents:

Section 1 of the advice sets out the background to ESMA’s work, while the detailed assessment of each of the aforementioned non-EU countries is contained in section 2. Annexes 1 to 7 contain a summary of the feedback to the call for evidence that ESMA launched in November 2014. Annex 8 gives a detailed breakdown by non-EU country of the number of non-EU AIFs and non-EU AIFMs active in Member States in accordance with Articles 36 and 42 of the AIFMD.

Structure of the advice:

  • First, the criteria, methodology and data used to assess the potential extension of the AIFMD passport to non-EU countries is presented;
  • The list of the non-EU countries to be assess by ESMA for the purposes of the present advice under Article 67 of the AIFMD is then established;
  • The different non-EU countries listed are assessed against the aforementioned methodology;
  • Information on other non-EU countries is given; and
  • A series of annexes detail the feedback received by ESMA via the responses to the call for evidence, and give a detailed breakdown by non-EU country of the number of non-EU AIFs and non-EU AIFMs active in Member States in accordance with Articles 36 and 42 of the AIFMD.

General advice on the potential extension of the passport

U.S.

  • Due to significant obstacles regarding investor protection, competition, market disruption and the monitoring of systemic risk impeding the application of the AIFMD passport to the U.S, ESMA advises the European Parliament, the Council and the Commission to delay their decision on the application of the passport to the U.S until such time as conditions which might lead to a distortion of competition are addressed.

Guernsey

  • ESMA is of the view that there are no significant obstacles regarding investor protection, competition, market disruption and the monitoring of systemic risk impeding the application of the AIFMD passport to Guernsey.

Jersey

  • ESMA is of the view that there are no significant obstacles regarding investor protection, competition, market disruption and the monitoring of systemic risk impeding the application of the AIFMD passport to Jersey.

Hong Kong

  • ESMA notes that detailed information on the Hong Kong regulatory framework remains incomplete. Therefore, more time is needed to analyse the extent to which the potential differences between the Hong Kong regulatory framework and the AIFMD may be material to the assessment on the potential application of the AIFMD passport to Hong Kong.

Switzerland

  • ESMA advises the European Parliament, the Council and the Commission that there will be no significant obstacles impeding the potential application of the AIFMD passport to Switzerland, upon the enactment of the amendments to the Federal Act on Stock Exchanges and Securities Trading (SESTA).

Singapore

  • ESMA advises the European Parliament, the Council and the Commission to delay their decision on the potential application of the AIFMD passport to Singapore.

 

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