The Alternative Investment Funds Managers Directive (AIFMD) was introduced in the EU in July 2011. Designed as part of the wider response to the 2008 financial crisis, it provides a regulatory framework for the previously unregulated Alternative Investment Fund Managers (hedge funds, private equity firms, real estate, and other investment trusts). Equivalent UK regulation applies to UK-based AIFMs post-Brexit.
AIFMD introduces strict compliance requirements around raising capital, risk monitoring and reporting, disclosures, marketing, transparency, and remuneration of AIFMs, and apply to all AIFMs who operate an AIF within the EU and UK, regardless of their domicile.
Disclosure requirements are in place to allow both greater transparency for investors, and for the national regulators to better monitor any systemic risk. For example, all AIFMs must complete specific disclosure reports on a T+30 basis at least annually, rising to quarterly depending on the volume of assets under management. These Private equity firms are required to provide further disclosures, regarding controlling influence on non-listed companies.
With the Level 1 and Level 2 requirements of AIFMD fully in effect, recent reviews from the European Commission have proposed some updates to the AIFMD regulation (AIFMD v2). These primarily concern loan origination, liquidity management and delegation to third-party firms. While the amendments are currently viewed as incremental rather than fundamentally changing the regulation, it gives firms and regulators a renewed focus on AIFMD, and futureproof their compliance.
Compliance with AIFMD is required to obtain an EU Financial Services Passport (or the UK equivalent), so hedge funds and private equity funds have every reason to invest in their compliance functions and ensure they are meeting their obligations.
SteelEye reduces the complexity and cost of financial compliance and provides a range of regulatory tools that enable effortless compliance with AIFMD. Book a demo to learn more about how SteelEye can help you Comply Smarter™.
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