AIFMD – ESMA Issues Advice on Extension of the AIFMD Passport

On 30 July ESMA issued:

• Its advice on extension of the AIFMD passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) (the “Advice”).
• Its opinion on the functioning of the passport for EU AIFMs and the national private placement regimes (NPPRs) (the “Opinion”).

In its Advice, ESMA assessed six jurisdictions – Guernsey, Hong Kong, Jersey, Singapore, Switzerland and the USA. The Advice concludes that no obstacles exist to the extension of the passport to Guernsey and Jersey, while Switzerland will remove any remaining obstacles with the enactment of pending legislation. No definitive view has been reached on the other three jurisdictions.

The Opinion contains ESMA’s preliminary assessment of the operation of the EU passport and NPPRs. ESMA’s preliminary view is that, given the short time period that has elapsed since the implementation of the AIFMD in EU Member States, a definitive assessment of their functioning is difficult and would recommend preparing a further opinion after a longer period.

However, ESMA has noted in the use of the EU passport divergent interpretations between EU member state regulators on what constitutes “marketing” “material changes” and a “professional investor”, and varying registration fees.

Read ESMA's press release: "ESMA advises on extension of AIFMD passport to non-EU jurisdictions" (30 July 2015). 

Read ESMA's advice to the European Parliament, the Council and the Commission on the application of the AIFMD passport to non-EU AIFMs and AIFs.

ESMA's opinion to the European Parliament, Council and Commission and responses to the call for evidence on the functioning of the AIFMD EU passport and of the National Private Placement Regimes.

On 22 July, ESMA updated its Q and A on the application of the AIFMD in two areas, reporting of AIFs by non-EU AIFMs marketing in the EU under Article 42 AIFMD, and reporting AUM.

ESMA has confirmed that when a non-EU AIFM reports information to the regulator in whose jurisdiction it is marketing as required by Article 42 AIFMD, only AIFs marketed in that jurisdiction have to be taken into account for the purpose of this reporting.

Regarding AUM, ESMA has clarified the that AIFMs should include AIFs created during the reporting period in calculating the total value of assets under management of the AIFM for that reporting period.

Read the updated Q&A on the Application of the AIFMD.

Capital Markets Union - New Resolution from European Parliament 

The European Parliament published a press release on 9 July 2015 announcing the adoption of a non-binding resolution on building a capital markets union (CMU), generally supporting the CMU.

Read the European Parliament's press release: "Capital Markets Union should ease cross-border investment and finance for SMEs" (9 July 2015). 

Read the provisional text to the resolution.

EMIR – New Counterparty Classification Letter

ISDA published a new standard form classification letter on 14 July 2015 that will enable counterparties to notify each other of their status for clearing and other regulatory requirements under EMIR.

The letter and accompanying guidance note are available below:

Read ISDA's explanatory memorandum to the form of the ISDA EMIR Classification Letter.

Read ISDA's press release: "ISDA Publishes EMIR Classification Letter" (14 July 2015).

UCITS V – ESMA Consults on Proposed Guidelines on Sound Remuneration Policies Under UCITS V Directive

ESMA has launched a consultation paper on 23 July 2015 on proposed guidelines on sound remuneration policies under the UCITS V Directive and AIFMD.

The proposed Guidelines aim to ensure a convergent application of remuneration provisions and will provide guidance on issues such as proportionality, governance of remuneration, requirements on risk alignment and disclosure. The final Guidelines will apply to UCITS management companies and national competent authorities.

The consultation also proposes a revision of the AIFMD Remuneration Guidelines by clarifying that in a group context, non-AIFM sectoral prudential supervisors of group entities may deem certain staff of an AIFM in that group to be identified staff for the purpose of their sectoral remuneration rules.

ESMA will aim to finalise and publish the UCITS Remuneration Guidelines and a final report by Q1 2016 ahead of the transposition deadline for UCITS V Directive (18 March 2016). The consultation period will run until 23 October 2015.

The press release and consultation paper are available here:

Read ESMA's press release "ESMA consults on UCITS remuneration guidelines" (23 July 2015).  

Read ESMA's consultation paper: "Guidelines on sound remuneration policies under the UCITS Directive and AIFMD".