European Union: Implementation Of EU Directive On Alternative Investment Fund Managers Into Italy Has Begun

Last Updated: 7 May 2014
Article by Alessandro E. Corno

Implementation and Scope of the Directive

On June 8, 2011, the European Parliament and the European Council issued Directive 2011/61/EU on alternative investment fund managers (the "AIFM Directive"). The AIFM Directive applies to alternative investment fund managers that manage and/or market alternative investment funds ("AIFs")—investment funds other than UCITS funds—in the EU and lays down a set of harmonized rules regarding authorization, operation, and transparency. The managers of real estate funds, private equity funds, venture capital funds, infrastructure funds, and hedge funds fall within the subjects to whom the provisions of the AIFM Directive apply.The AIFM Directive governs alternative investment fund managers ("AIFMs") only and maintains the power to regulate the structure of AIFs and the supervision of AIFMs at the level of each EU Member State.

On December 19, 2012, the European Commission issued the Commission-delegated Regulation (EU) No. 231/2013 (the "AIFM Regulation"), which implements certain provisions of the AIFM Directive.1
The deadline for the implementation of the AIFM Directive by each EU Member State was July 22, 2013, but Italy was not able to implement the AIFM Directive within that time frame. Regardless, the Bank of Italy and the CONSOB stated that certain provisions of the AIFM Directive2 were directly enforceable into Italy—starting from July 22, 2013—via a joint notice issued on July 26, 2013. 

On July 22, 2013, the AIFM Regulation became effective in each EU Member State, since the AIFM Regulation did not require any formal implementation act. On March 4, 2014, Legislative Decree No. 44, implementing the AIFM Directive into Italy (the "Legislative Decree"), was issued. 3 The Legislative Decree came into force on April 9, 2014.

Changes to the Unified Financial Act 

The Legislative Decree introduces material changes to the provisions of the Legislative Decree No. 58 of February 24, 1998 (the "Unified Financial Act") on collective portfolio management. However, the Legislative Decree incorporates the general terms of the AIFM Directive only and refers the relevant technical aspects to a set of level 2 and 3 regulatory measures to be issued by the Bank of Italy, the CONSOB, and the Ministry of Economy and Finance, each within its relevant powers (the "New Regulations").4 

The establishment, management and marketing of Italian AIFs will continue to be ruled by the current set of Italian level 2 and 3 regulations (the "Current Regulations"), as described below in greater details, until the New Regulations will be issued and come into force. 

Key News 

SICAFs. The Legislative Decree has introduced the SICAF,5 a new type of closed-ended undertaking for collective investment incorporated as a company with fixed capital.

The EU Passport. Through the EU passport, an AIFM licensed in its home Member State, pursuant to the implementing regulations of the AIFM Directive of its home Member State, may manage and/or market AIFs in Member States other than its home Member State via a passporting of its AIFM Directive's license. Any marketing activity carried out taking advantage of the EU passport may be addressed only to professional investors. 

The Registration Procedure. AIFMs managing one or more AIFs for a total value not exceeding certain thresholds fixed in advance may benefit from a smooth registration procedure pursuant to the AIFM Directive rather than applying for an AIFM Directive license.6 The AIFM Directive granted each EU Member State with the power to issue stricter provisions in relation to such AIFMs. It appears that Italy has exercised its power to provide stricter provisions by introducing: (i) the authorization procedure for all the Italian AIFMs as a general rule, regardless of the total value of the portfolios of the AIFs managed by the AIFMs; and (ii) the registration process, as an exception to the general authorization procedure, only for Italian AIFMs incorporated as special joint stock companies ("Società di gestione del risparmio" or "SGR") and currently managing AIFs that meet the requirements to qualify as "European funds for venture capital" and "European social Entrepreneurship funds" under, respectively, the EU Regulation No. 345/2013 and the EU Regulation No. 346/2013.

Operation of EU AIFMs within the EU

Existing Italian AIFMs: SGRs. SGRs managing Italian AIFs 7 are deemed as already licensed to manage such funds in accordance with the Current Regulations and can therefore continue to carry out their management activity. By July 22, 2014, SGRs shall implement the necessary measures to comply with the provisions implementing the AIFM Directive and file a notice with the Bank of Italy. 

In their capacity as licensed AIFMs, Italian SGRs may: (i) establish, manage, and market Italian AIFs in Italy; (ii) establish and manage Italian AIFs in Italy and market such funds in Italy and/or in other Member States taking advantage of the EU passport; and (iii) establish and manage AIFs in a Member State other than Italy and market such funds in Italy and/or in other Member States taking advantage of the EU passport.           

Other Existing Italian AIFMs. Italian entities other than SGRs carrying out collective management of alternative investment funds services upon the date on which the Legislative Decree entered into force (e.g., investment companies) may continue to provide such services, provided that, by July 22, 2014, they implement all the necessary measures to comply with the provisions implementing the AIFM Directive and file an application request for the AIFM Directive's license with the Bank of Italy. 

New Italian AIFMs. Licensing procedures of new SGRs will continue to be ruled by the Current Regulations until the New Regulations are issued and enter into force. 

EU AIFMs. EU AIFMs licensed in their home EU Member State pursuant to the relevant provisions implementing the AIFM Directive may: (i) establish and manage AIFs in their home Member State and market such funds in their home EU Member State and/or in other host Member States taking advantage of the EU passport, including Italy; and (ii) establish, manage, and market Italian AIFs and market them into Italy and/or into other EU Member States taking advantage of the EU passport.  

Marketing of EU AIFs

Existing Italian AIFs. Italian undertakings for collective investment reserved to qualified investors and Italian speculative undertakings for collective investment8 are to be considered as Italian reserved AIFs pursuant to the provisions of the Unified Financial Act as amended by the Legislative Decree. 

SGRs may continue marketing the Italian AIFs for which the fundraising period is still running on the basis of the existing legal framework until the New Regulations come into force. Starting from the entry into force of the New Regulations, Italian AIFs may be marketed only to professional investors and the categories of nonprofessional investors pointed out under the New Regulations. 

SGRs managing Italian AIFs for which the fundraising period is still running are to be deemed as licensed to carry out marketing activities in Italy pursuant to the provisions of the Unified Financial Act, as amended by the Legislative Decree, and must implement by July 22, 2014 the necessary measures to comply with the provisions implementing the AIFM Directive. 

New Italian AIFs. The marketing of new Italian AIFs to Italian investors continues to be ruled by the Current Regulations. Italian undertakings for collective investment reserved to qualified investors and Italian speculative undertakings for collective investments may be marketed only to professional investors and to the categories of nonprofessional investors pointed out by the New Regulations, as of the New Regulations' effective date. 

SGRs marketing new AIFs must implement the necessary measures to comply with the provisions implementing the AIFM Directive by July 22, 2014. 

EU AIFs. The marketing of Non-Italian EU AIFs in Italy authorized before July 22, 2013 may continue to be marketed to professional investors and investors that subscribe the units of reserved funds and speculative funds pursuant to the Current Regulations' effective date. As of the effective date of the New Regulations, the same requirements described in "New Italian AIFs" (paragraphs 2 and 3 above) will apply. 

With regard to non-Italian EU AIFs for which a marketing authorization procedure in Italy is currently pending pursuant to the former provisions of the Unified Financial Act, the simplified notification procedure set forth under Article 32 of the AIFM Directive for the marketing of EU AIFs into a host EU Member State will apply. Any marketing authorization filed pursuant to the former provisions of the Unified Financial Act will be deemed as expired. 

This Commentary provides just a preliminary analysis of some limited aspects relating to the implementation of the AIFM Directive into Italy. Once the New Regulations have been implemented, it will be possible to provide a more comprehensive analysis. 

Footnotes

1. In particular, we refer to the provisions on exemptions, general operating conditions, custodians, leverage, transparency, and surveillance.

2. In particular, we make reference to the provisions on the EU passport concerning the marketing of EU AIFs into Italy and the establishment of Italian AIFs by EU AIFMs authorized in their home Member State pursuant to the AIFM Directive. For additional information on the EU passport regime, please refer to "Key News," below.

3. The Legislative Decree was published into the Italian Official Gazette (Gazzetta Ufficiale) on March 25, 2014.

4. The definitions contained under the Unified Financial Act have been amended and a new Title III on collective portfolio management, which replaced the previous Title III, has been added by way of the Legislative Decree.

5. Pursuant to the Unified Financial Act, as amended by the Legislative Decree, SICAF means: "the closed-ended undertaking for collective investment incorporated as a joint stock company (Società per azioni) with fixed corporate capital, having its registered office and its headquarter in Italy, and whose sole object is the collective investment of funds collected through the offering of its own shares and other equity instruments."

6. Article 3 of the AIFM Directive points out that the provisions on registration apply to AIFMs managing: (i) portfolios of AIFs whose managed assets, including any assets acquired through the recourse to leverage, do not exceed the overall threshold of EUR 100,000; and (ii) portfolios of AIFs whose managed assets do not exceed the overall threshold of EUR 500,000, if the portfolio of AIFs consists of AIFs that do not recur to leverage and do not provide reimbursements rights to their investors for a period equal to five years from the date of the initial investment in each AIF.

7. For example, real estate funds and private equity funds.

8. For example, real estate funds and private equity funds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Alessandro E. Corno
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions