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Home > Blogs > All About Alpha > AIFMD Europe-Wide Standardization not Yet Accomplished

AIFMD Europe-Wide Standardization not Yet Accomplished

AIFMD Europe-Wide Standardization not Yet Accomplished All About Alpha

A recent study found that only 12 of the 27 member states of the European Union have thus far completed full legislative transposition of the Alternative Investment Fund Managers Directive. Further, five member states “have made little or no progress” toward such a transposition.

The study is the joint work of the Alternative Investment Management Association and the professional services firm Ernst & Young.

As our readers surely know, AIFMD formally came into force on Monday, July 22. It is a wide-ranging directive that applies to all non-UCITS funds either managed or marketed in Europe.

A Multi-Colored Map


In the map above, the green countries have completed the transposition.

In the blue countries, the pertinent laws have been drafted by they await final legislative approval.

But that still leaves a sizable bloc of countries where such work is still in its early stages if it has begun at all (red), or where no information is available to the outside world about where the country is in the drafting process (yellow).

Jiri Kroll, AIMA’s Deputy CEO, Head of Government & Regulatory Affairs, said: “It rarely happens that all Member States transpose on time but we are encouraged by the progress that is being made by some of the key asset management and fund jurisdictions in implementing the Directive.

She also said that there are “significant areas of uncertainty even in those jurisdictions that have transposed the text.”

Julian Young, Partner, EMEIA Asset Management, E&Y, said that firms will need to “operate across a patchwork quilt of regulatory standards for the next few years at least.”

AIFMD allows EU member states some discretion in the creation of transitional relief as part of the transposing legislation. Most (14) of the member states that have created transposing legislation – those that are either green or blue on the above map — are providing a one year period of transition. For those 14 countries, the transition applies whether the AIFM is domestic, non-domestic but within the European Economic Area, or outside of the EEA.

But for two of those 14 countries, (Ireland and Malta) there is a two year transitional period for non-EEA AIFMs in some circumstances.

For another two countries (Latvia and the Netherlands) transitional relief has been offered only to domestic managers.

Abstract Art


The European Commission adopted Regulation 231/2013 on December 19, 2012. This Regulation implemented AIFMD, and provided details on reporting obligations.

On May 25, 2013, the European Securities and Markets Authority, a Paris-based super-regulator, issued a template designed to assist fund managers who don’t receive the benefit of a transitional period to make their submissions starting in January 2014.

But ESMA at the time expressed its view that “there is a need to supplement the Regulation with further guidelines on reporting obligations,” and that the format of the information that must be sent to national competent authorities (NCAs) must be standardized.

ESMA’s document included (at p.59, in Annex V) an amusingly complicated flow-chart entitled “Reporting obligation diagram.” Yes, I recognize that those who are working on compliance aren't amused, by the range of blue rectangles, white rectangles, and diamonds connected by arrows does make for an intriguing bit of abstract art.

This article was written by Christopher Faille and originally published in AllAboutAlpha under the title: AIFMD Europe-Wide Standardization: Not Yet Accomplished

Tags: AIFMD , EU , European Union , hedge fund , Industry trends , regulation
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