After much anticipation, the European
Securities and Markets Authority (ESMA) has published further
advice in relation to the application of the Alternative Investment
Fund Managers Directive (AIFMD) passport to non-EU Alternative
Investment Managers (AIFMs) and Alternative Investment Funds (AIFs)
in twelve countries.
ESMA concluded that there are no
significant obstacles impeding the application of the AIFMD
passport to Guernsey and Jersey, being two of only five
jurisdictions to achieve an unqualified assessment.
Currently, non-EU AIFMs and AIFs must
comply with each EU country's national regime when they market
funds in that country. The extension of the AIFMD passport regime,
which is currently only available to EU entities, would allow
Channel Islands managers and managers of Channel Islands funds to
seek a passport under AIFMD, so that they could market and manage
throughout the EU.
This advice follows ESMA's initial
recommendation in July 2015 that Guernsey and Jersey should be
granted an AIFMD passport and will now be considered by the
European Commission, Parliament and Council (the EU
Institutions). In principle, the Commission should, within
three months of the publication of positive advice from ESMA, adopt
a delegated act specifying the date when the AIFMD passport will be
extended to non-EU AIFMs and AIFs. The advice notes, however,
that the EU Institutions may wish to consider waiting until ESMA
has delivered positive advice on a sufficient number of non-EU
countries before adopting such delegated act, taking into account
the potential impact on the market that a decision to extend the
passport might have amongst other factors.
The immediate advantage of the AIFMD
passport will be the ability of Guernsey and Jersey funds (and
funds managed by Guernsey and Jersey managers), once a passport has
been received, to be marketed to professional investors throughout
the EU on the basis of a regulator to regulator notification
system, subject to full compliance with the AIFMD. However,
Channel Islands funds managed in the Channel Islands or otherwise
outside of the EU (and non-EU funds managed by Channel Islands
managers) will still be able to market into the EU via national
private placement regimes (subject to domestic legislation of the
Member States) until at least 2018, meaning that they need only
comply with AIFMD reporting and disclosure requirements until such
time as AIFMD passports become mandatory.
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.
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