Directive 2011/61/EU of the European Parliament and the European Council on alternative investment fund managers.
The AIFMD aims to create a harmonised regulation framework for alternative funds distributed in the European Union (EU).
The AIFMD has the objective of regulating the alternative investment fund managers and the distribution of AIFs in the European Union in order to ensure investor protection and avoid systemic risk.
The AIFMD applies to:
- EU AIFMs managing AIFs, irrespective of their country of domiciliation (EU AIFs or non-EU AIF)
- Non-EU AIFMs managing EU AIFs
- Non-EU AIFMs which market their AIFs in the EU
Key topics covered by the Level 1 (Directive)
With an objective of harmonisation, the Directive covers key topics:
- Capital requirements
- Delegation of duties to third parties
- Use of leverage funds
- Valuation requirements by the investment manager himself or by an outside expert
- Conduct of business
- Remuneration policies
- Reporting to National Competent Authorities,
- Marketing provisions and rules in relation to third countries
- Depositary provisions
Key topics covered by Level 2: Calculation of assets under management, method used to calculate leverage, level of additional capital, operating requirements applicable to managers, delegation of financial management duties, risk management, liquidity management, depositaries’ responsibilities and reporting requirements.