ESMA has published its final opinion and advice on Article 67 (1) AIFMD i.e. on passporting of EU AIFMs and national private placement regimes, as well as on the extension of the AIFMD passport to non-EU AIFMs and non-EU AIFs.
On 30 July 2015, the European Securities and Markets Authority (ESMA) published its advice to the European Parliament, the Council and the Commission on the application of the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on alternative investment fund managers (AIFMD) and more especially on the AIFMD passport to non-EU alternative investment fund managers (AIFMs) and alternative investment funds (AIFs).
The ESMA also published its opinion on the functioning of the passport for EU AIFMs and the national private placement regimes (NPPRs).
The advice and opinion have been sent to the Commission, Parliament and Council for their consideration on whether to activate the relevant provisions in the AIFMD extending the passport through a delegated act.
1. ESMA’s advice
The advice relates to the possible extension of the AIFMD passport, currently only available to EU entities, to non-EU AIFMs and non-EU AIFs which are currently subject to EU NPPRs. In its advice, ESMA assessed six non-EU countries: Guernsey, Hong Kong, Jersey, Switzerland, Singapore and the United States.
ESMA considers that there are no obstacles to the extension of the passport to Guernsey and Jersey, while Switzerland will remove any remaining obstacles with the enactment of pending legislation. However, no definitive view has been reached on the other three jurisdictions due to concerns related to competition, regulatory issues and a lack of sufficient evidence to properly assess the relevant criteria.
2. ESMA’s opinion
The opinion relates to the functioning of the EU passport and the NPPRs and contains ESMA’s preliminary assessment of the operation of these two mechanisms. ESMA considers that the delay in the implementation of the AIFMD, as well as the delay in the transposition in some Member States make a definitive assessment difficult and recommends preparing a further opinion after a longer period of implementation in all Member States.
In its opinion ESMA identified several issues in relation to the use of the EU passport (e.g. divergent approaches on marketing rules, various interpretations of what activities constitute “marketing” and “material changes” in different Member States). However, ESMA considers that at this stage there is no sufficient evidence to indicate that the AIFMD EU passport and NPPRs have raised major issues in terms of functioning and implementation of the AIFMD framework.