The European Securities and Markets Authority ("ESMA") has published its second set of advice ("Advice") addressed to the EU law-making institutions on the extension of the Alternative Investment Fund Managers Directive ("AIFMD") passport to non-EU alternative investment fund managers ("AIFMs") and non-EU alternative investment funds ("AIFs").

The AIFMD passport is currently only available to authorised EU AIFMs and EU AIFs, while the management and marketing of AIFs by non-EU AIFMs and marketing of non-EU AIFs is governed by national regimes.

Of the 12 jurisdictions assessed to date, ESMA has concluded that the passport should be extended to five countries: Canada, Guernsey, Japan, Jersey and Switzerland. In relation to Singapore, Hong Kong and Australia, ESMA concludes that these jurisdictions have met the relevant assessment criteria, subject to some caveats relating to market access. In the case of the United States, concerns relating to reciprocal market access and the creation of an unlevel playing field have led ESMA to suggest that the AIFMD passport be extended to a restricted category of US funds. ESMA was unable to finalise its assessment of the Cayman Islands and Bermuda due to the pending implementation of AIFMD-like regimes in those jurisdictions, while it could not reach a definitive assessment of the Isle of Man at this time.

We have prepared a briefing note summarising the conclusions reached in ESMA's Advice in respect of each jurisdiction.

Next Steps

ESMA's Advice has been sent to the European Commission, European Parliament and Council of the EU for their consideration. Under the AIFMD, the Commission is required to adopt the necessary legislation extending the passport within three months of receiving positive advice from ESMA. However, the Commission has previously confirmed that it would take a decision regarding adopting this legislation when a "sufficient number" of countries have been appropriately assessed, without giving an indication of what it would consider to be a sufficient number.


ESMA identified a total of 22 countries in its first set of advice to be assessed for the purposes of the AIFMD passport extension. Following two rounds of advice, ESMA has now issued unqualified positive advice in relation to just 5 out of those 22 countries. Whether the Commission will adopt the necessary legislation extending the passport therefore remains unclear, and the date from which identified non-EU AIFMs will be able to apply for the AIFMD passport may still be some way off.

The Central Bank of Ireland has stated in guidance that it will revisit its currently applicable transitional arrangements for non-EU AIFMs in the event that the Commission adopts legislation extending the passport, with a view to revising its position to align it with the Commission's decision and any transitional arrangements put in place. We will of course keep our clients advised of any further developments.

ESMA's Advice may be accessed here: ESMA Advice.

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