The European Securities and Markets Authority ("ESMA") published on February 2nd 2014 a "Questions and Answers" document ("FAQ Document") on the practical application of the Directive 2011/61/EU on alternative investment fund managers ("AIFMD"). See our newsletter of March 2014.
The aim of the FAQ Document is to promote common supervisory approaches and practices in the application of the AIFMD and its implementing measures by providing answers to questions posed by the general public and competent authorities.
On March 25th and June 27th 2014 ESMA updated the FAQ Document. The main amendments in March relate to the reporting requirements under article 24 of the AIFMD. ESMA has provided clarifications relating to among others:
- the consideration of repurchase transactions as financing operations.
- the use of the residual maturity as of the reporting date when reporting information on 'instruments traded and individual exposures'.
- the date to submit the last report of an alternative investment fund ("AIF") that has been liquidated or put into liquidation; such report should be submitted no later than one month after the end of the quarter in which the AIF has been liquidated or put into liquidation.
- investors liquidity shall be calculated by dividing the AIF's net asset value among the period buckets depending on the shortest period within which investors are entitled, under the fund documents, to withdraw invested funds or receive redemption payments.
- the meaning of inception date; it shall be the date of authorisation of an AIF or of its establishment if authorisation is not necessary or if the AIF is only subject to registration obligations.
- the language of the reporting; ESMA recommends that it be English.
- the extent of the identification of the 5 biggest counterparties to whom the AIF has exposure; if they do not have BIC or LEI codes, in such case only the full name of the counterparty needs to be reported.
- the necessity to reply to questions 296 to 301 of the consolidated reporting template; this is only required by AIFMs managing AIFs employing leverage on a substantive basis.
The amendments made in June include the following:
- a new question 5 has been added to the section on remuneration clarifying when portfolio managers can be excluded from the scope of identified staff.
- 3 new questions are added to the section dealing with reporting clarifying what countries are covered by the term "EEA" and the "Union" and what the terms "mandatory", "optional" and "conditional" mean in the technical guidance.
- Certain clarifications have been made around notifications of AIFMs under article 33 of the AIFMD.
- A new Section V on MiFID services has been added. The first question highlights the amendment to the AIFMD included in Directive 2014/65/EU (MiFID 2) on AIFMs authorised to provide MiFID investment services under article 6(4) of the AIFMD. Pursuant to the amendment such AIFMs have the right to provide those services on a cross border basis. Member States must allow such passporting of services from July 2015 but are recommended to do so even before.
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