Regulatory updates
The FSA published its Discussion Paper concerning the transposition of the Directive with a deadline for comments of 23 March 2012 which gives some useful insight into the way the FSA have interpreted the AIFMD. Click here to view the full Discussion Paper.
The FSA estimates that over 2,650 investments managers and collective investment schemes could be within the scope of the new regulator’s (“FCA”) perimeter and that over 1,000 firms and schemes are likely to be within the scope of the Directive. The FSA will undertake a preliminary firm categorisation exercise to determine more accurately identify the number of firms and schemes that are likely to be within the scope of the Directive.
Firms will need to consider the following factors when deciding the extent to which the Directive will affect them:
- the domicile of Alternative Investment Fund (‘AIF’);
- the location of the potential Alternative Investment Fund Manager (‘AIFM’);
- value of AIF funds under management;
- the extent and location of any marketing activities in the EU;
- legal and contractual arrangements between the AIFM and the AIF under management; and
- the location of the AIF depositaries
Key practical issues discussed:
- whether the Regulated Activities Order should be amended with the creation of a new regulated activity 'managing AIFs';
- how the Regulatory Capital rules should be applied;
- changes to the way that AIF may be promoted from 22 July 2013; and
- options for implementing the Directive's remuneration requirements including developing a Remuneration Code to apply specifically to AIFMs
An FSA Consultation paper is to be published later this year to achieve transposition of the rules by 22 July 2013. Firms are likely to need to apply for the new permission from April 2013 if they intend the FSA authorised firm to be the AIFM.
For more information please contact Andrew Shrimpton or Andrew Lowin.
