By Jenny Swan
While EU jurisdictions will need to deal with the implementation of the Alternative Investment Fund Managers Directive (AIFMD), Jersey-based managers and funds will be able to carry on business as usual.
The ongoing crisis in the Eurozone and the increasing agenda of regulatory reform have unknown outcomes, however both have the potential to fundamentally change the asset management industry. Who would have predicted at the beginning of the financial crisis that the regulatory reform that was initially aimed at the banks would transform virtually every segment of the financial services industry? The AIFMD introduces comprehensive regulatory changes for alternative fund managers operating in, or marketing into, the EU.
Jersey has a long and established history of providing financial services to the EU markets, especially the UK, and has developed specific expertise in alternative asset classes; particularly in private equity, real estate and hedge funds. While EU jurisdictions will be required to deal with the implementation of AIFMD, subject to EU member state agreements being in place Jersey-based managers and funds will be able to carry on business as usual until at least 2018 through private placement regimes.
At the time of writing there is still a great deal of uncertainty regarding the implications and implementation of the AIFMD, however we are seeing that clients are looking for a jurisdiction that can offer an existing regulatory framework governing such vehicles which allow immediate access to the target investor markets but without the need to adapt to the AIFMD in the short term.
The degree of choice and flexibility offered by Jersey enables managers to choose a less onerous and more cost effective solution, whilst at the same time offering those managers wishing to operate within the directive the means to combine the current benefits of the jurisdiction with an AIFMD compliant product.
Jersey will continue to maintain manager and investor confidence through stability, high standards of supervision, and responsible and appropriate regulation. The jurisdiction's expanded product range and flexible regulatory regime offers a route to market that is attractive to all industry participants located in Europe, Asia and Latin America.
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