The European Securities and Markets Authority (ESMA) has recommended to the European Parliament, Council and Commission that the AIFMD passport be extended to Guernsey and Jersey.

Commenting on the impact of the recommendation Appleby Corporate Partner, Andrew Weaver said: "The recommendation by ESMA is significant for both Guernsey and Jersey: when implemented by the EU institutions both jurisdictions will be able to run fully AIFMD compliant regimes, with the benefit of the passport, whilst at the same time giving the option not to participate in the AIFMD if they are not marketing in Europe."

Andrew went on to say: "The building of such a robust AIFMD framework is the result of a great deal of hard work with each of Jersey's and Guernsey's governments, the regulators and the industry working together in a coordinated approach. This endorsement by ESMA is the culmination."

ESMA assessed six jurisdictions who were selected based on a number of factors including the amount of activity already being carried out by entities from these countries under the national private placement regimes (NPPRS), EU national authorities' knowledge and experience of dealing with their counterparts and the efforts by stakeholders from these countries to engage with ESMA's process.

ESMA's advice concludes that no obstacles exist to the extension of the passport to Guernsey and Jersey.

Following ESMA's recommendation, there is now a period of up to six months for the European Commission to propose appropriate legislation and for the European Parliament and Council of Ministers to agree to the third country passporting rules becoming applicable to Jersey and Guernsey EU Alternative Investment Funds and by EU Alternative Investment Fund Managers.

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