Following implementation of the Alternative Investment Fund Managers Directive (AIFMD or the Directive) into UK law in July 2013, the UK Financial Conduct Authority (FCA) advised UK firms in August 2013 to apply for authorisation or variation of permission (VoP) by no later than 22 January 2014. See Dechert OnPoint “New Deadline set for FCA Applications for New Permissions under the Alternative Investment Fund Managers Directive”.

This date was earlier than the expectation raised by the text of the Directive itself, and led to the concern that AIFMs not authorised as such by 22 July 2014 may have to stop operating. In response to the concerns raised, the Treasury announced last week that it intends to amend the AIFMD implementing regulations to make clear that, if a transitional AIFM’s application is submitted without time for the FCA to determine it by 22 July, the AIFM will be able to continue managing AIFs until the FCA has determined the application. In practice, this will allow transitional firms more breathing space to prepare their applications. The Treasury announcement reminds firms that the long-stop date for submission to the FCA and compliance with relevant AIFMD requirements remains 22 July 2014.

On 28 November, we devoted the 14th instalment in our series of AIFMD breakfast seminars to considering 20 questions that UK managers preparing for AIFMD authorisation need to resolve over the coming weeks (by no means an exhaustive list!). In relation to each question, we asked the assembled audience of around 150 managers and other industry professionals to rate their level of “readiness” on each point. The results of that preparedness survey are below, along with a summary of the commentary on each point discussed at the event.

Question 1 - Have I identified all my Alternative Investment Funds (AIFs)?

Question 2 - Have I identified all my Alternative Investment Fund Managers (AIFMs)?

Question 3 - What kind of AIFM will I be in the UK?

Question 4 - Will I need to establish a new entity?

Question 5 - Am I geared up for reporting?

Question 6 - Am I geared up for new investor relations requirements?

Question 7 - Should I apply for any EEA passports?

Question 8 - Do I know my new regulatory capital requirement?

Question 9 - What changes will I need to make to my compliance policies and procedures?

Question 10 - Will I value internally or appoint an external valuer?

Question 11 - How will I comply with the functional and hierarchical separation requirements?

Question 12 - What will my depositary arrangements be?

Question 13 - How will my PPM need to change?

Question 14 - How will my investment management agreement change?

Question 15 - How will my administration arrangements change?

Question 16 - How will my remuneration policy change?

Question 17 - Will I need new professional indemnity insurance?

Question 18 - Am I on top of the VoP form?

Question 19 - How will my relationship with fund directors change?

Question 20 - How will my distribution arrangements change?

We would like to take this opportunity to wish all our clients and friends very best wishes for the festive season and look forward to seeing you at an AIFMD breakfast in 2014!