18 April 2024

AIFMD II Comes Into Force In April 2024

Akin Gump Strauss Hauer & Feld LLP


Akin is a law firm focused on providing extraordinary client service, a rewarding environment for our diverse workforce and exceptional legal representation irrespective of ability to pay. The deep transactional, litigation, regulatory and policy experience we bring to client engagements helps us craft innovative, effective solutions and strategies.
The final text of the amendments to the EU Alternative Investment Fund Managers Directive (AIFMD)—known as "AIFMD II"—was published in the Official Journal of the European Union on March 26, 2024...
United States Finance and Banking
To print this article, all you need is to be registered or login on

The final text of the amendments to the EU Alternative Investment Fund Managers Directive (AIFMD)—known as "AIFMD II"—was published in the Official Journal of the European Union on March 26, 2024, and will enter into force on April 15, 2024. EU member states have 2 years after publication to transpose the rules into national law. This means AIFMD II will apply from April 16, 2026, with some rules subject to a transitional period. As summarised in a previous note, AIFMD II incorporates material amendments to specific provisions of the AIFMD, and managers should assess how the changes in AIFMD II may impact their business or operations. As a result of the United Kingdom's (UK) exit from the European Union (EU), the changes introduced by AIFMD II will not apply to the UK's version of the AIFMD. However, aspects of the AIFMD II rules will still be relevant for UK and other non-EU alternative investment fund managers (AIFMs) that market funds in the EU under the national private placement regime or act as delegate investment managers to EU AIFMs. The amending instrument also amends the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive.

The principal new requirements under AIFMD II have been summarised below.1 Please note that the new loan origination regime is not discussed in this summary, but you can find more information in our note on loan origination funds under AIFMD II accessible here.


New Requirements

Authorisation of AIFMs

More granular information regarding the AIFM, its resources and the persons effectively conducting the business of the AIFM including, among other things:

  • A description of staff members' role, title and level of seniority, reporting lines and responsibilities vis-à-vis the AIFM and other entities, e.g., other group firms.
  • An overview of the time each such staff member allocates to each responsibility.
  • A description of the technical and human resources that support their activities and that the AIFM will use to comply with the AIFMD.
  • A description of the human and technical resources that the AIFM will use in performing day-to-day portfolio- or risk-management tasks.
  • A description of the human and technical resources used and the periodic due diligence measures employed by the AIFM to monitor delegated tasks.
  • With respect to each alternative investment fund (AIF) under the AIFM's management, a brief description of the delegated portfolio management or the delegated risk management functions, specifying whether the delegation is partial or full.

Requirement to have two reputable and appropriately qualified persons that are either full-time employees of the AIFM or directors (or similar) of the AIFM who are EU residents and "committed full-time" to the AIFM's business.


Increased disclosure regarding delegation arrangements. This includes that host AIFMs will be required to provide material information to the regulator regarding their delegation arrangements.

The information provided at the authorisation stage by the AIFM regarding the delegation and subdelegation arrangements of the AIFM is expanded to include at least:

  • The legal name and relevant identifier of the delegate(s).
  • The jurisdiction of establishment of the delegate(s).
  • The regulator of the delegate(s) (if applicable).

The delegated activities which must notified to the regulator are expanded to include any Annex I function and the Markets in Financial Instruments Directive (MiFID) services an AIFM may provide under the top-up permissions.

Accordingly, the AIFM must be able to demonstrate that the delegate is qualified and capable of performing the tasks delegated to it.

AIFMD expressly provides that the AIFM shall ensure that the performance of the functions in Annex I and the provision of the MiFID services comply with the AIFMD, "irrespective of the regulatory status or location of any delegate or sub-delegate". While this may simply represent the codification of existing guidance regarding regulatory standards applicable to delegates, it could represent a tightening of the level of compliance expected of non-EU delegates.

AIFMD II carves out of the scope of delegated marketing activities undertaken by distributors acting on their own behalf or through insurance-based investment products in compliance with MiFID.

The European Securities and Markets Authority (ESMA) will issue a report in 2029 regarding market practice regarding delegation arrangements and compliance with the new substance requirements.

Conflicts of Interest

If an AIFM manages an AIF at the initiative of a third party (including AIFs branded with a third party's name or if an AIFM delegates portfolio management to a third party), the AIFM must provide detailed explanations to its regulator, including an explanation of the steps it has taken to prevent conflicts of interest arising from the relationship or how the AIFM identifies, manages, monitors and (if applicable) discloses those conflicts to safeguard the interests of the AIF and the investors.

Liquidity Management

EU AIFMs that manage open-ended AIFs must employ at least two liquidity management tools from a specified list, including redemption gates and redemption fees; redemptions in kind (not suitable for retail investors); anti-dilution levies; swing or dual pricing; and extensions of notice periods.

The liquidity management tools must be appropriate to the AIF's liquidity profile, redemption policy and the investment strategy, liquidity profile and redemption policy.

The EU AIFM must have in place appropriate policies and procedures, including adequate oversight arrangements, governing the use of the liquidity management tools. The EU AIMF must notify its regulator of the same and alert them to the activation and deactivation of the tools. Regulatory intervention is permitted in exceptional circumstances, e.g., to require the suspension of redemptions.

Where objectively necessary and justifiable and in the best interests of the investors, an EU AIFM of an open-ended AIF may also temporarily suspend redemptions or activate side pockets.


The proposals confirm that EU MiFID firms that act on their own behalf and market the fund managed by an EU AIFM are not considered delegates of the AIFM, regardless of any distribution agreement.

Article 23 Investor Disclosure

The pre-investment (and periodic) investor disclosure requirements under Article 23 of the AIFMD are expanded to include the name of the AIF, a list of the fees, charges and expenses covered by the EU AIFM in connection with the operation of the AIF that are directly or indirectly allocated to the AIF and information on the possibility and conditions for using liquidity management tools (relevant to open-ended funds).

One item to keep an eye on in the future will be guidelines ESMA will issue on unfair, unclear or misleading names.

New periodic investor disclosures will include the composition of originated loan portfolios; all fees, charges and expenses directly or indirectly borne by investors; and disclosure of any parent company, subsidiary or special purpose entity used for the AIF's investments by or on behalf of the EU AIFM. The scope of the last disclosure item is currently somewhat unclear, but it is likely to capture, e.g., origination services provided by parent undertakings as well as warehousing arrangements.

As the periodic disclosures must be made at least annually, these are likely to be included in the AIF's annual report.

Regulatory Reporting – Annex IV

The regulatory reporting obligations will be extended as follows:

Scope of markets, instruments and assets, etc.AIFM's reporting will cover all markets, instruments and exposures and assets of each AIF that it manages as well as relevant identifiers (including legal entity identifiers (LEIs)). The current, more limited scope only requires reporting of the principal markets and instruments in which, and the main instruments that, the AIFM trades as well as the most important concentrations of the AIFs it manages.

Marketing.A list of EU member states in which the AIF is marketed.

Leverage. The total amount of leverage employed by the AIF.


  • The value and percentage of the AIFM's assets under management in respect of which portfolio management is delegated.
  • A description of the risk and portfolio management items/tasks delegated.
  • Quite detailed information on delegation arrangements concerning portfolio-management or risk-management functions specifying whether the delegation is full or partial, including:
    • Delegate's name, domicile, close links with the AIFM, authorisation status, supervisory authority and relevant identifier.
    • The number of full-time-equivalent staff employed by the AIFM to perform its day-to-day portfolio- or risk-management tasks and to monitor delegation.
    • The human and technical resources of the AIFM to perform its day-to-day portfolio- or risk-management tasks and to monitor delegation.
    • Description of the due diligence carried out by the AIFM to monitor delegation, including the number and dates of periodic reviews, identification and correction measures to address any issues and the date by which issues will be addressed.
    • Commencement and expiry dates for delegation and subdelegation arrangements.
    • With respect to subdelegation arrangements, information concerning each subdelegate, the activities and functions delegated as well as value and percentage of assets subdelegated.

The Annex IV reporting requirements will apply from 2027, and a revised Annex IV template will be published in advance.

Marketing Requirements – Non-EU Managers

Non-EU AIFMs seeking to register AIFs under their management for marketing in the EU under the national private placement regime (where available) will be subject to revised threshold conditions.

AML/CTF standards.Both the non-EU AIFM and the non-EU AIF mustnotbe established in a jurisdiction that the EU Commission has designated as having strategic deficiencies in its anti-money laundering (AML) or counter-terrorist financing (CTF) regimes. The same retriction applies to the use of a depositary located in a non-EU jurisdiction. The EU's list of high-risk third countries can be accessed here.2

Tax cooperation standards. The jurisdictions of incorporation or establishment of the AIMF and the AIF must also:

  • Have in place an agreement with each relevant EU member state in which the marketing registration is submitted. The agreement must comply with the standards laid down in Article 26 of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital to ensure an effective exchange of information in tax matters, including any multilateral tax agreements.
  • Not be on the EU list of non-cooperative tax jurisdictions.

The same restriction applies to the use of a depositary located in a non-EU jurisdiction.

Employee schemes. The new rules also clarify that an EU AIFM is permitted to market an EU AIF which invests predominantly in the shares of a particular company to the employees of that company or its affiliates within the framework of employee savings or participation schemes, including on a cross-border basis.


1. AIFMD II also include additional provisions, including with respect to depositaries and the scope of activities of an AIFM, which are not discussed in this note.


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.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More