The European Securities and Markets Authority (below ‘ESMA’) promotes common supervisory approaches and practices in respect of the application of the European Directive on Alternative Investment Fund Managers (below the ‘AIFMD’) and its implementing measures.
In this context, ESMA has publishedQuestions & Answers (below ‘Q&A’) on the application of the AIFMD. These Q&A have been updated on 30 September 2014.
Furthermore, ESMA issued Guidelines on key concepts of the AIFMD and Guidelines on sound remuneration policies applicable to alternative investment fund managers (below ‘AIFM’). On 29 September 2014, the Belgian supervisory authority, the FSMA, has published two Position Papers in order to confirm that those guidelines will be used by the FSMA in exercising its supervision.
ESMA publishes updated Q&A on the application of the AIFMD
On 30 September 2014, ESMA published an update of its Q&A document on the application of the AIFMD.
The latest updated questions concern:
- Section III – Reporting to the national competent authorities (Questions 36 to 46);
In accordance with article 42 of the AIFMD, Member States may allow non-EU AIFMs to market their alternative investment funds (below ‘AIFs’) in their territory only, without a passport, and subject to at least certain conditions including reporting requirements.
In these updated Q&A, ESMA provides for practical information on how to implement the reporting obligation. It details specific issues in relation to: reporting after the marketing period, reporting frequency, use of NAV versus use of total value of assets under management, determination of the position type (long or short), etc.
- Section VIII – Delegation (Question 1)
Under the AIFMD regime, delegation by an AIFM of portfolio management and/or risk management functions may not result for such AIFM in becoming a letter-box entity (and hence no longer be considered as manager of the AIF as a result of the delegation).
The updated Q&A document provides further information in relation to the assessment to be made regarding letter-box entity provisions.
ESMA Guidelines on key concepts of AIFMD and sound remuneration policies applicable to AIFM implemented by the FSMA
On 29 September 2014, the FSMA published two Position Papers concerning the implementation of the Guidelines issued by ESMA.
The first Position Paper concerns the ESMA Guidelines on key concepts in relation to the AIFMD. These Guidelines notably provide clarifications on the various concepts used in the definition of an AIF under Article 4(1) (a) of the AIFMD, such as:
– Treatment of compartments;
– The words ‘undertakings for collective investment’;
– The words ‘capital raising’;
– The words ‘number of investors’;
– The words ‘defined investment policy’.
In this respect, the FSMA noted that the Guidelines detailed the concept of AIF as defined under article 3, 2° of the Act of 19 April 2014 on AIF and their managers.
The second Position Paper concerns the ESMA Guidelines on sound remuneration policies applicable to AIFMs. These Guidelines provide guidance in relation to:
– Concept of remunerations covered by these guidelines
– Identification of staff categories
– Proportionality rule
– AIFMs being part of a group
– Financial situation of the AIFM
– Governance rules regarding remuneration
– Specific requirements regarding risk alignment process
– Disclosure matters
In relation thereto, the FSMA confirmed that those principles are useful for the application of articles 40 to 43 and 61, §1st, 5°, 6° of the Act of 19 April 2014 on AIF and their managers.
The FSMA will hence refer to the above Guidelines in exercising its supervision.
- Position Paper regarding the ESMA Guidelines on key concepts of the AIFMD
- Position Paper regarding the ESMA Guidelines on sound remuneration policies applicable to the AIF managers