- Proposal for a Directive on
Alternative Investment Fund Managers
Welcome to the March 2010 edition of our newsletter.
Today we will forget the summaries of the
Alternative Investment Fund Managers (AIFMs) directive, and we
will spend a couple of hours trying to understand the details.
Yes, it is time to read the directive itself.
EU Directive on Alternative Investment Fund Managers (AIFMs)
Proposal for a Directive on Alternative Investment Fund Managers
from the International Association of Hedge
Funds Professionals (IAHFP)
Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on Alternative Investment Fund Managers and amending Directives
2004/39/EC and
2009/…/EC
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and
in particular Article
47(2) thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Economic and Social
Committee,
Having regard to the opinion of the European Central Bank,
Acting in accordance with the procedure laid down in Article 251 of
the Treaty,
Whereas:
(1) Managers of alternative investment funds (AIFM) are responsible
for the management
of a significant amount of invested assets in Europe, account for
significant amounts
of trading in markets for financial instruments, and can exercise an
important influence
on markets and companies in which they invest;
(2) The impact of
Alternative Investment Fund Managers (AIFM) on the markets in which they operate is
largely beneficial, but
recent financial difficulties have underlined how activities of
Alternative Investment Fund Managers (AIFM)
may also serve to
spread or amplify risks through the financial system.
Uncoordinated
national
responses to these risks make the efficient management of these
risks difficult.
This
Directive therefore aims at establishing common requirements
governing the
authorisation and supervision of
Alternative Investment Fund Managers (AIFM) in order to provide a coherent
approach to the
related risks and their impact on investors and markets in the
Community.
(3) Recent difficulties in financial markets have underlined that
many
Alternative Investment Fund Managers (AIFM) strategies are
vulnerable to some or several important risks in relation to
investors, other market
participants and markets.
In order to provide comprehensive and
common
arrangements for supervision, it is necessary to establish a
framework capable of
addressing those risks taking into account the diverse range of
investment strategies
and techniques employed by
Alternative Investment Fund Managers (AIFM).
Consequently, this Directive should
apply to
AIFM managing and marketing all types of funds which are not covered
by Directive
2009/…/EC on the coordination of laws, regulations and
administrative provisions
relating to the undertakings for collective investment in
transferable securities
(UCITS) (recast) irrespective of the legal or contractual manner
in which the AIFM
is entrusted with this responsibility.
AIFM should not be entitled
to manage UCITS
within the meaning of Directive 2009/…/EC on the basis of
authorisation under this
Directive.
(4) The Directive lays down requirements regarding the way in which
Alternative Investment Fund Managers (AIFM) should
manage alternative investment funds (AIF) under their
responsibility.
It would be
disproportionate to regulate the structure or composition of the
portfolios of the AIF
managed by AIFM and it would be difficult to provide for such
extensive
harmonisation due to the very diverse types of AIF managed by
Alternative Investment Fund Managers (AIFM).
(5) The scope of this Directive should be confined to the management
of collective
investment undertakings which raise capital from a number of
investors with a view to
investing it in accordance with a defined investment policy on the
principle of risk spreading
for the benefit of those investors.
This Directive should
not apply
to the
management of pension funds or managers of non-pooled investments
such as
endowments, sovereign wealth funds or assets hold on own account by
credit
institutions, insurance or reinsurance undertakings.
This Directive
should neither apply
to actively managed investments in the form of securities, such as
certificates,
managed futures, or index-linked bonds.
It should, however, cover
managers of all
collective investment undertakings which are not required to be
authorised as UCITS.
Investment firms authorised under Directive 2004/39/EC on
Markets in
Financial
Instruments should not be required to obtain an authorisation
under this Directive in
order to provide investment services in respect of AIF.
Investment
firms can however
only provide investment services in respect of AIF, if and to the
extent the units or
shares thereof can be marketed in accordance with this Directive.
(6) In order to avoid imposing excessive or disproportionate
requirements, this Directive
provides for an exemption for AIFM where the cumulative AIF under
management
fall below a threshold of EUR 100 million.
The activities of the
Alternative Investment Fund Managers (AIFM) concerned are
unlikely to have significant consequences for financial stability or
market efficiency.
For AIFM which only manage unleveraged AIF and do not grant
investors redemption
rights during a period of five years a specific threshold of
EUR 500
million applies.
This specific threshold is justified by the fact that managers of
unleveraged funds,
specialised in long term investments, are even less likely to cause
systemic risks.
Furthermore, the five years lock-up of investors eliminates
liquidity risks.
AIFM
which are exempt from this Directive should continue to be subject
to any relevant
national legislation.
They should however be allowed to be treated
as
Alternative Investment Fund Managers (AIFM) subject to
the opt-in procedure foreseen by this Directive.
(7) This Directive aims at providing a harmonised and stringent
regulatory and
supervisory framework for the activities of
Alternative Investment Fund Managers (AIFM). Authorisation in
accordance with this Directive should cover the services of management and
administration of AIF
throughout the Community.
In addition, authorised
Alternative Investment Fund Managers (AIFM) should be
entitled to market
AIF in the Community to professional investors, subject to a
notification procedure.
(8) This Directive does not regulate AIF and therefore does not
prevent Member States
from adopting or from continuing to apply additional requirements in
respect of AIF
established on their territory.
The fact that a Member State may
impose additional
requirements on AIF domiciled on its territory should not prevent
the exercise of
rights of
Alternative Investment Fund Managers (AIFM) authorised in other Member States in accordance with
this Directive to
market to professional investors AIF domiciled outside the Member
State imposing
additional requirements and which are therefore not subject to and
do not need to
comply with those additional requirements.
(9) Without prejudice to the application of other instruments of
Community law, Member
States may impose stricter requirements on
Alternative Investment Fund Managers (AIFM) whenever AIFM market
an AIF
solely to retail investors or whenever AIFM market the same AIF both
to professional
and retail investors, irrespective of whether units or shares of
this AIF are marketed on
a domestic or cross-border basis.
These two exceptions enable Member
States to
impose additional safeguards which they deem necessary for the
protection of retail
investors.
This takes account of the fact that AIF
are often
illiquid and subject to high
risk of substantial capital loss.
Investment strategies in relation
to AIF are generally
not adapted to the investment profile or needs of retail investors.
They are more
suitable for professional investors and investors having a
sufficiently large investment
portfolio so as to be able to absorb the higher risks of loss
associated with these
investments.
Nevertheless, Member States may allow the marketing of
all or certain
types of AIF managed by
Alternative Investment Fund Managers (AIFM) to retail investors on their territory.
Against the
background of paragraphs 4 and 5 of Article 19 of Directive
2004/39/EC, Member
States should continue to ensure that appropriate provision is made
whenever they
permit the marketing of AIF to retail investors.
Investment firms
authorised in
accordance with Directive 2004/39/EC which provide investment
services to retail
clients have to take into account these additional safeguards when
assessing whether a
certain AIF is suitable or appropriate for an individual retail
client.
Where a Member
State allows the marketing of AIF to retail investors on its
territory, this possibility
should be available regardless of the Member State where the AIFM is
established,
and any additional provisions should apply on a non-discriminatory
basis.
(10) In order to ensure a high level of protection of clients of
investment firms within the
meaning of Directive 2004/39/EC, AIF should not be considered as
non-complex financial instruments for the purposes of that Directive.
That
Directive should
therefore be amended accordingly.
(11) It is necessary to provide for the application of minimum
capital requirements to
ensure the continuity and the regularity of the management services
provided by the
Alternative Investment Fund Managers (AIFM).
The ongoing capital requirements should cover the potential
exposure of
Alternative Investment Fund Managers (AIFM)
to professional liability in respect of all their activities,
including management services
provided under delegation or on the basis of a mandate.
(12) It is necessary to ensure that
Alternative Investment Fund Managers (AIFM) operate subject to
robust
governance controls.
AIFM should be managed and organised so as to minimise
conflicts of
interest.
Recent
developments underline the crucial need to separate asset
safe-keeping and
management functions, and segregate investor assets from those of
the manager.
To this end, the AIFM has to appoint a depositary and entrust it with
the booking of
investor money on a segregated account, the safe-keeping of
financial instruments and
the verification of whether the AIF or the
Alternative Investment Fund Managers (AIFM) on behalf of the AIF
has obtained
ownership of all other assets.
(13) Reliable and objective asset valuation is crucial for the
protection of investor interests.
Different
Alternative Investment Fund Managers (AIFM) employ different methodologies and systems for
valuing assets,
depending on the assets and markets in which they predominantly
invest.
It is
appropriate to recognise these differences but to, nevertheless,
require the valuation of
assets to be undertaken by an entity which is independent of the AIFM.
(14)
Alternative Investment Fund Managers (AIFM) may delegate responsibility for the performance of its
functions in accordance
with this Directive.
AIFM should remain responsible for the proper
performance of
their functions and compliance with the rules set out in this
Directive.
(15) Given that AIFM employing high levels of leverage in their
investment strategies may,
under certain conditions, contribute to the build up of systemic
risk or disorderly
markets, special requirements should be imposed on
Alternative Investment Fund Managers (AIFM) using
certain techniques
giving rise to particular risks.
The information needed to detect,
monitor and respond
to those risks has not been collected in a consistent way throughout
the Community,
and shared across Member States so as to identify potential sources
of risk to the
stability of financial markets in the Community.
To remedy this
situation, special
requirements should apply to AIFM, which consistently use high
levels of leverage in
their investment strategies.
Those
Alternative Investment Fund Managers (AIFM) should be
obliged to
disclose information
regarding their use and sources of leverage.
That information should
be aggregated
and shared with other authorities in the Community, so as to
facilitate a collective
analysis of the impact of the leverage of those
Alternative Investment Fund Managers (AIFM) on the
financial system in the
Community, as well as a common response.
(16) Activities of AIFM based on the use of high levels of leverage
could be detrimental to
the stability and efficient functioning of financial markets.
It is
considered necessary to
allow the Commission to impose limits on the level of leverage that
AIFM could use,
in particular in those cases where
Alternative Investment Fund Managers (AIFM) employ
high levels of
leverage on a
systematic basis.
The limits to the maximum amount of leverage
should take into
account aspects related to the source of leverage and the strategies
employed by the
Alternative Investment Fund Managers (AIFM).
They should also take into account the essentially dynamic
nature of the
management of leverage by most
Alternative Investment Fund Managers (AIFM) using a
high level of leverage.
In this respect
the limits to leverage could for example either consist in a
threshold that should not be
breached at any point in time or a limit on the average leverage
employed during a
given period (i.e. monthly or quarterly).
(17) It is necessary to ensure that an AIFM provides all companies
over which it can
exercise a controlling or dominant influence with the information
necessary for the
company to assess how this controlling influence in the short to
medium term impacts
the company's economic and social situation.
To this end, particular
requirements
should apply to
Alternative Investment Fund Managers (AIFM) managing AIF which are in a position to
exercise controlling
influence over a listed or non-listed company, in particular to
notify the existence of
this position and to disclose information to the company and all its
other shareholders
about the intentions of the AIFM with regard to the
future business
development and
other planned changes of the controlled company.
In order to ensure
transparency
regarding the controlled company, enhanced reporting requirements
should apply. The
annual reports of the relevant AIF should be supplemented with
information that is
specific to the type of investment and the controlled company.
(18) Many
Alternative Investment Fund Managers (AIFM) currently manage AIF domiciled in third countries.
It
is appropriate to
allow authorised
Alternative Investment Fund Managers (AIFM) to manage AIF domiciled in third countries,
subject toappropriate arrangements that ensure the sound administration of
those AIF and the
effective safe-keeping of assets invested by Community investors.
(19)
Alternative Investment Fund Managers (AIFM) should also be able to market AIF domiciled in third
countries to professional
investors both in the home Member State of the AIFM and in other
Member States.
That right should be subject to notification procedures and the
existence of a tax
agreement with the third country concerned which ensures an
efficient exchange of
information with the tax authorities in the domicile of the
Community investors.
Given
the fact that such AIF and the third country in which they are
domiciled have to meet
additional requirements, some of which first have to be laid down in
implementing
measures, the rights granted under the Directive to market AIF
domiciled in third
countries to professional investors should only become effective
three years after the
transposition period.
In the meantime Member States may allow or
continue to allow
Alternative Investment Fund Managers (AIFM) to market AIF domiciled in third countries to professional
investors on their
territory subject to national law.
During this period of three
years,
Alternative Investment Fund Managers (AIFM) can however
not market such AIF to professional investors in other Member States
on the basis of
rights granted under this Directive.
(20) It is appropriate to allow the
Alternative Investment Fund Managers (AIFM) to delegate administrative
tasks to an entity
established in a third country provided that necessary safeguards
are in place.
Similarly, a depositary may delegate its depositary tasks in respect
of AIF domiciled in
a third country to a depositary domiciled in that third country,
provided that the
legislation of that third country ensures a level of protection of
investor interests which
is equivalent to that in the Community.
Under certain conditions, it
should also be
possible for the
Alternative Investment Fund Managers (AIFM) to appoint an independent valuator established
in a third
country.
(21) Subject to the existence of an equivalent regulatory framework
in a third country, as
well as of effective access for
Alternative Investment Fund Managers (AIFM) established in the Community to
the market of
that third country, Member States should be allowed to authorise AIFM in accordance
with the provisions of this Directive, without requiring that it has
a registered office in
the Community, after a period of three years as from the end of the
transposition
period.
This period takes account of the fact that such
Alternative Investment Fund Managers (AIFM)and the
third country in
which they are domiciled have to meet additional requirements some
of which first
have to be laid down by implementing measures.
(22) It is necessary to clarify the powers and duties of competent
authorities responsible for
implementing this Directive, and to strengthen the mechanisms needed
to ensure the
necessary level of cross-border supervisory cooperation.
(23) The relative importance of the activities of
Alternative Investment Fund Managers (AIFM) in some
financial markets, especially
in those cases where the AIF they manage do not have a material
interest in the
underlying products or instruments from which those markets derive,
could, under
some circumstances, hinder the efficient functioning of those
markets.
For example it
could make those markets excessively volatile or affect the correct
pricing of the
instruments traded in them. It is therefore considered necessary to
make sure the
competent authorities enjoy the powers necessary to monitor the
activities of
Alternative Investment Fund Managers (AIFM) in
those markets and to intervene in those circumstances where it would
be necessary to
protect their orderly functioning.
(24) Member States should lay down rules on sanctions applicable to
infringements of the
provisions of this Directive and ensure that they are implemented.
The sanctions
should be effective, proportionate and dissuasive.
(25) Any exchange or transmission of information between competent
authorities, other
authorities, bodies or persons should be in accordance with the
rules on transfer of
personal data as laid down in Directive 95/46/EC of the European
Parliament and of
the Council of 24 October 1995 on the protection of individuals with
regard to the
processing of personal data and on the free movement of such data.
(26) The measures necessary for the implementation of this Directive
should be adopted in
accordance with Council Decision 1999/468/EC of 28 June 1999 laying
down the
procedures for the exercise of implementing powers conferred on the
Commission.
(27) In particular the Commission should be empowered to adopt the
measures necessary
for the implementation of this Directive. In this respect, the
Commission should be
able to adopt measures determining the procedures under which AIFM
managing
portfolios of AIF whose assets under management do not exceed the
threshold set out
in this Directive may exercise their right to be treated as
Alternative Investment Fund Managers (AIFM) covered by this
Directive.
These measures are also designed to specify the criteria
to be used by
competent authorities to assess whether AIFM comply with their
obligations as
regards their conduct of business, the type of conflicts of
interests AIFM have to
identify, as well as the reasonable steps
Alternative Investment Fund Managers (AIFM) are expected to take
in terms of internal
and organizational procedures in order to identify, prevent, manage
and disclose
conflicts of interest.
They are designed to specify the risk
management requirements to
be employed by AIFM as a function of the risks which the
Alternative Investment Fund Managers (AIFM) incurs
on behalf of
the AIF that it manages as well as any arrangements needed to enable
AIFM to
manage the particular risks associated with short selling
transactions, including any
relevant restrictions that might be needed to protect the AIF from
undue risk
exposures.
They are designed to specify the liquidity management
requirements of this
Directive and in particular the minimum liquidity requirements for
AIF.
They are
designed to specify the requirements that originators of
securitisation instruments have
to meet in order for an AIFM to be allowed to invest in such
instruments issued after 1
January 2011.
They are as well designed to specify the requirements
that AIFM have
to comply with when investing in such securitisation instruments.
They are designed
to specify the criteria under which a valuator can be considered
independent in the
meaning of this Directive.
They are designed to specify the
conditions under which the
delegation of AIFM functions should be approved and the conditions
under which the
manager could no longer be considered to be the manager of the AIF
in case of
excessive delegation.
They are designed to specify the content and
format of the
annual report that AIFM have to make available for each AIF they
manage and to
specify the disclosure obligations of
Alternative Investment Fund Managers (AIFM) to investors and
reporting requirements to
competent authorities as well as their frequency.
They are designed
to specify the
disclosure requirements imposed on AIFM as regards leverage and the
frequency of
reporting to competent authorities and of disclosure to investors.
They are designed to
setting limits to the level of leverage AIFM can employ when
managing AIF
They are
designed to determine the detailed content and the way
Alternative Investment Fund Managers (AIFM)
acquiring controlling
influence in issuers and non-listed companies should fulfil their
information obligation
towards issuers and non-listed companies and their respective
shareholders and
representatives of employees, including the information to be
provided in the annual
reports of the AIF they manage.
They are designed to specify the
types of restrictions
or conditions that can be imposed on the marketing of AIF to
professional investor in
the home Member State of the AIFM.
They are designed to specify
general criteria for
assessing equivalence of valuation standards of third countries
where the valuator is
established in a third country, the equivalence of legislation of
third countries
regarding depositaries and, for the purpose of the authorisation of
Alternative Investment Fund Managers (AIFM) established in
third countries, the equivalence of prudential regulation and
ongoing supervision.
They are designed to specify general criteria for assessing whether
third countries
grant Community AIFM effective market access comparable to that
granted by the
Community to AIFM from third countries.
They are designed to specify
the
modalities, content and frequency of exchange of information
regarding AIFM
between the competent authorities of the home Member State of the
AIFM and other
competent authorities where the AIFM individually or collectively
with other
Alternative Investment Fund Managers (AIFM)
may have an impact on the stability of systemically relevant
financial institutions and
the orderly functioning of markets.
They are designed to specify the
procedures for on the-spot verifications and investigations.
(28) Since those measures are of general scope and are designed to
amend non-essential
elements of this Directive, by supplementing it with new
non-essential elements, they
must be adopted in accordance with the regulatory procedure with
scrutiny provided
for in Article 5a of Decision 1999/468/EC.
Measures not falling
under the above
category should be subject to the regulatory procedure provided in
Article 5 of that
Decision.
Those measures are designed to state that the fund
valuation standards of a
specific third country are equivalent to those applicable in the
Community where the
valuator is established in a third country.
They are designed to
state that the legislation
on depositaries of a specific third country is equivalent to this
Directive.
They are
designed to state that the legislation on prudential regulation and
on-going supervision
of AIFM in a specific third country is equivalent to this Directive.
They are designed
to state whether a specific third country grants Community AIFM
effective market
access comparable to that granted by the Community to
Alternative Investment Fund Managers (AIFM) from that
third country.
They are designed to specify standard models for notification and
attestations and to
specify the procedure for the exchange of information between
competent authorities.
(29) Since the objectives of the action to be taken, namely to
ensure a high level of
consumer and investor protection by laying down a common framework
for the
authorisation and supervision of
Alternative Investment Fund Managers (AIFM) cannot be sufficiently
achieved by the Member
States, as evidenced by the deficiencies of existing nationally
based regulation and
oversight of these actors, and can therefore, be better achieved at
Community level,
the Community may adopt measures, in accordance with the principle
of subsidiarity
as set out in Article 5 of the Treaty. In accordance with the
principle of
proportionality, as set out in that Article, this Directive does not
go beyond what is
necessary in order to achieve those objectives.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter I
General provisions
Article 1
Subject matter
This Directive lays down the rules for the authorisation, ongoing
operation and transparency
of the managers of alternative investment funds (AIFM).
Article 2
Scope
1. This Directive shall apply to all
Alternative Investment Fund Managers (AIFM) established in the
Community, which provide
management services to one or more alternative investment funds (AIF)
irrespective
of:
(a) whether the AIF is domiciled inside or outside of the Community;
(b) whether the AIFM provides its services directly or by
delegation;
(c) whether the AIF belongs to the open-ended or closed-ended type;
(d) the legal structure of the AIF and of the AIFM.
An
Alternative Investment Fund Manager (AIFM) authorised in accordance with this Directive to provide
management
services to one or more AIF is also entitled to market shares or
units of these AIF to
professional investors in the Community subject to the conditions
laid down in
Chapter VI and, where relevant, Article 35.
2. This Directive shall
not
apply to any of the following:
(a)
Alternative Investment Fund Managers (AIFM)
which either directly or indirectly through a company with
which the
AIFM is linked by common management or control, or by a substantive
direct
or indirect holding, manage portfolios of AIF whose assets under
management,
including any assets acquired through use of leverage,
in total do
not exceed a
threshold of 100 million Euro or 500 millions euros when the
portfolio of AIF
consists of AIF that are not leveraged and with no redemption rights
exercisable during a period of 5 years following the date of
constitution of each
AIF;
(b) AIFM established in the Community which do not provide
management
services to AIF domiciled in the Community and do not market AIF in
the
Community;
(c) UCITS or their management or investment companies authorised in
accordance
with Directive 2009/…/EC [the UCITS Directive];
(d) credit institutions which are covered by Directive 2006/48/EC of
the European
Parliament and the Council of 14 June 2006 relating to the taking up
and
pursuit of the business of credit institutions (recast);
(e) institutions which are covered by Directive 2003/41/EC of the
European
Parliament and the Council of 3 June 2003 on the activities and
supervision of
institutions for occupational retirement provision13;
(f) institutions which are covered by the First Council Directive
73/239/EEC of 24
July 1973 on the coordination of laws, regulations and
administrative
provisions relating to the taking-up and pursuit of the business of
direct
insurance other than life assurance14, Directive 2002/83/EC of the
European
Parliament and of the Council of 5 November 2002 concerning life
assurance
and Directive 2005/68/EC of the European Parliament and Council of
16
November 2005 on reinsurance and amending Council Directives
73/239/EEC,
92/49/EEC as well as Directives 98/78/EC and 2002/83/EC16;
(g) supranational institutions, such as the World Bank, the IMF, the
ECB, the EIB,
the EIF, other supranational institutions and similar international
organisations,
in case such institutions or organisations manage one or several
AIFs.
3. Member States shall ensure that AIFM not reaching the threshold
set out in
paragraph 2(a) are entitled to be treated as
Alternative Investment Fund Managers (AIFM) falling under the
scope of this
Directive.
4. The Commission shall adopt implementing measures with a view to
determining the
procedures under which AIFM managing portfolios of AIF whose assets
under
management do not exceed the threshold set out in paragraph 2(a) may
exercise their
right under paragraph 3.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 3
Definitions
For the purpose of this Directive, the following definitions shall
apply:
(a) 'Alternative investment fund'
or AIF means any collective
investment undertaking, including investment compartments thereof whose object
is the
collective investment in assets and which does not require
authorisation
pursuant to Article 5 of Directive 2009/…/EC [the UCITS Directive];
(b) 'manager of alternative investment funds '
or AIFM means any
legal or natural
person whose regular business is to manage one or several AIF;
(c) 'Valuator' means any legal or natural person or company valuing
the assets or
establishing the value of the shares or units of an AIF;
(d) 'management services' means the activities of managing and
administering one
or more AIF on behalf of one or more investors;
(e) 'Marketing' means any general offering or placement of units or
shares in an
AIF to or with investors domiciled in the Community, regardless of
at whose
initiative the offer or placement takes place;
(f) 'Professional investor' means any investor within the meaning of
Annex II of
Directive 2004/39/EC;
(g) 'Retail investor' means any investor who is not a professional
investor;
(h) 'home Member State' means the Member State in which the AIFM has
been
authorised pursuant to Article 6;
(i) 'host Member State' means a Member State, other than the home
Member
State, within the territory of which an AIFM provides management
services to
AIF or markets shares or units thereof;
(j) 'Competent authorities' means the national authorities which are
empowered by
law or regulation to supervise AIFM;
(k) 'Financial instrument' means an instrument as specified in Annex
I Section C of
Directive 2004/39/EC;
(l) 'Leverage' means any method by which the AIFM increases the
exposure of an
AIF it manages to a particular investment whether through borrowing
of cash
or securities, or leverage embedded in derivative positions or by
any other
means;
(m) ‘Qualifying holding’ means any direct or indirect holding in an AIFM which
represents 10% or more of the capital or of the voting rights or
which makes it
possible to exercise a significant influence over the management of
the AIFM
in which that holding subsists. For this purpose the voting rights
referred to in
Articles 9 and 10 of Directive 2004/109/EC of the European
Parliament and of
the Council of 15 December 2004 on the harmonisation of transparency
requirements in relation to information about issuers whose
securities are
admitted to trading on a regulated market17 shall be taken into
account;
(n) 'Issuer' means any issuer of shares domiciled in the Community
within the
meaning of Article 2(1)(d) of Directive 2004/109/EC;
(o) 'Representatives of employees' means representatives of
employees as defined
by Article 2(e) of Directive 2002/14 of 11 March 2002 establishing a
general
framework for informing and consulting employees in the European
Community.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter II
AUTHORISATION OF AIFM
Article 4
Requirement for authorisation
1. Member States shall ensure that no
Alternative Investment Fund Manager (AIFM) covered by this Directive
provides
management services to any AIF or markets shares or units thereof
without prior
authorisation.
Entities which are neither authorised in accordance with this
Directive nor, in case of
Alternative Investment Fund Managers (AIFM) not covered by this Directive, in accordance with the national
law of a
Member State, shall not be allowed to provide management services to
AIF or
market units or shares thereof within the Community.
2.
Alternative Investment Fund Managers (AIFM) may be
authorised to provide management services either for
all or certain
types of AIF.
An AIFM may hold an authorisation pursuant to this Directive and be
authorised as a
management or investment company pursuant to Directive 2009/…/EC – [UCITS
Directive]
Article 5
Procedure for granting the authorisation
An AIFM applying for an authorisation shall provide the following to
the competent
authorities of the Member State where it has its registered office:
(a) information on the identities of the
Alternative Investment Fund Managers (AIFM) shareholders or
members, whether
direct or indirect, natural or legal persons, that have qualifying
holdings and of
the amounts of those holdings.
(b) a programme of activity, including information on how the
Alternative Investment Fund Manager (AIFM)
intends to
comply with its obligations under chapters III, IV and where
applicable, V, VI
and VII;
(c) detailed information about the characteristics of the AIF it
intends to manage,
including the identification of the Member States or third countries
on whose
territory they are domiciled;
(d) the fund rules or instruments of incorporation of each AIF the
Alternative Investment Fund Manager (AIFM) intends to
manage;
(e) information on arrangements made for the delegation to third
parties of
management services functions as referred to in Article 18 and where
applicable Article 35;
(f) information on the arrangements made for the safe-keeping of the
assets of AIF
including, where applicable, arrangements made under Article 38;
(g) any additional information referred to in Article 20(1).
The AIFM must have its head office in the same Member State as its
registered office.
Article 6
Conditions for granting the authorisation
1. The competent authorities of the home Member State shall grant
authorisation only if
they are satisfied that the
Alternative Investment Fund Manager (AIFM) will be able to fulfil the
conditions of this Directive.
The authorisation shall be valid for all Member States.
2. The competent authorities of the home Member State shall refuse
authorisation
where the effective exercise of their supervisory functions is
prevented by any of the
following:
(a) the laws, regulations or administrative provisions of a third
country governing
one or more natural or legal persons with which the AIFM has close
links as
defined in Article 4(31)of Directive 2004/39/EC;
(b) difficulties involved in the enforcement of those laws,
regulations and
administrative provisions .
3. The authorisation shall cover any delegation arrangements made by
the
Alternative Investment Fund Managers (AIFM) and
communicated in the application.
The competent authorities of the home Member State may restrict the
scope of the
authorisation, in particular as regards the type of AIF the AIFM is
allowed to
manage, as well as the delegation arrangements.
4. The competent authorities shall inform the applicant, within two
months of the
submission of a complete application, whether or not authorisation
has been granted.
Reasons shall be given whenever an authorisation is refused or when
restrictions are
imposed.
5. AIFM may start providing management services in the home Member
State as soon
as the authorisation is granted.
Article 7
Changes in the scope of the authorisation
AIFM shall, before implementation, notify the competent authorities
of the home Member
State of any change regarding the information provided in their
initial application that may
substantially affect the conditions under which the authorisation
has been granted, in
particular changes of the investment strategy and policy of any AIF
managed by it, of the AIF
rules or instruments of incorporation and the identity of any
further AIF the
Alternative Investment Fund Manager (AIFM) intends to
manage.
The competent authorities shall, within a month of receipt of that
notification, either approve,
or impose restrictions, or reject those changes.
Article 8
Withdrawal of the authorisation
The competent authorities may withdraw the authorisation issued to
an AIFM where that
AIFM:
(1) has obtained the authorisation by making false statements or by
any other
irregular means;
(2) no longer fulfils the conditions under which authorisation was
granted;
(3) has seriously or systematically infringed the provisions
transposing this
Directive.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter III
Operating conditions for AIFM
SECTION 1: CONDUCT OF BUSINESS
Article 9
General principles
1. Member States shall ensure that
Alternative Investment Fund Managers (AIFM) may provide their management
services
within the Community only if they comply with the provisions of this
Directive on
an ongoing basis.
The
Alternative Investment Fund Managers (AIFM) shall:
(a) act honestly, with due skill, care and diligence and fairly in
conducting itsactivities;
(b) act in the best interests of the AIF it manages, the investors
of those AIF and
the integrity of the market;
(c) ensure that all AIF investors are treated fairly.
No investor may obtain a preferential treatment, unless this is
disclosed in the AIF
rules or instruments of incorporation.
2. The Commission shall adopt implementing measures specifying the
criteria to be
used by competent authorities to assess whether AIFM comply with
their obligation
under paragraph 1.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 10
Conflicts of interest
1. Member States shall require
Alternative Investment Fund Managers (AIFM) to take all reasonable steps to
identify conflicts of
interest between the AIFM, including their managers, employees or
any person
directly or indirectly linked to the AIFM by control, and the
investors in AIF
managed by the AIFM or between one investor and another that arise
in the course of
managing one or more AIF.
Alternative Investment Fund Managers (AIFM) shall
maintain and operate effective organisational and
administrative
arrangements with a view to taking all reasonable steps designed to
prevent conflicts
of interest from adversely affecting the interests of the AIF and
its investors.
Alternative Investment Fund Managers (AIFM) shall
segregate within its own operating environment, tasks and
responsibilities which may be regarded as incompatible with each
other.
Alternative Investment Fund Managers (AIFM) shall
assess whether its operating conditions may involve any other
material conflicts of
interest and disclose them to the AIF investors.
2. Where organisational arrangements made by the AIFM to manage
conflicts of
interest are not sufficient to ensure, with reasonable confidence,
that risks of damage
to investors' interests will be prevented, the AIFM shall clearly
disclose the general
nature or sources of conflicts of interest to the investors before
undertaking business
on their behalf, and develop appropriate policies and procedures.
3. The Commission shall adopt implementing measures:
(a) further specifying the types of conflicts of interests as
referred to in paragraph
1;
(b) specifying the reasonable steps AIFM are expected to take in
terms of internal
and organizational procedures in order to identify, prevent, manage
and
disclose conflicts of interest.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 11
Risk management
1. The
Alternative Investment Fund Managers (AIFM) shall
ensure that the functions of risk management and
portfolio
management are separated and subject to separate reviews.
2. The
Alternative Investment Fund Managers (AIFM)
shall implement risk management systems in order to
measure and
monitor appropriately all risks associated to each AIF investment
strategy and to
which each AIF is or can be exposed to.
The
Alternative Investment Fund Managers (AIFM) shall
review the risk management systems at least once a
year and adapt
it, whenever necessary.
3. The
Alternative Investment Fund Managers (AIFM) shall at least:
(a) implement an appropriate, documented and regularly updated due
diligence process when investing on behalf of the AIF, according to the
investment
strategy, the objectives and risk profile of the AIF;
(b) ensure that the risks associated to each investment position of
the AIF and their
overall effect on the AIF's portfolio can be accurately identified,
measured and
monitored at any time through appropriate stress testing procedures;
(c) ensure that the risk profile of the AIF shall correspond to the
size, portfolio
structure and investment strategies and objectives of the AIF as
laid down in
the AIF rules or instruments of incorporation.
4. In the case of AIFM which engage in short selling when investing
on behalf of one
or more AIF, Member States shall ensure that the AIFM operates
procedures which
provide it with access to the securities or other financial
instruments at the date when
the AIFM committed to deliver them, and that the AIFM implements a
risk
management procedure which allows the risks associated with the
delivery of short
sold securities or other financial instruments to be adequately
managed.
5. The Commission shall adopt implementing measures further
specifying the
following:
(a) the risk management requirements to be employed by AIFM as a
function of
the risks which the AIFM incurs on behalf of the AIF that it
manages;
(b) any arrangements needed to enable AIFM to manage the particular
risks
associated with short selling transactions, including any relevant
restrictions
that might be needed to protect the AIF from undue risk exposures.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 12
Liquidity management
1. For each AIF it manages the AIFM shall employ an appropriate
liquidity
management system and adopt procedures which ensure that the
liquidity profile of
the investments of the AIF complies with its underlying obligations.
The
Alternative Investment Fund Managers (AIFM) shall regularly conduct stress tests, both under normal and
exceptional
liquidity conditions and monitor the liquidity risk of the AIF
accordingly.
2.
Alternative Investment Fund Managers (AIFM) shall ensure that each AIF it manages has a redemption
policy which is
appropriate to the liquidity profile of the investments of the AIF
and which must be
laid down in the AIF rules or instruments of incorporation.
3 The Commission shall adopt implementing measures further
specifying:
(a) the liquidity management requirements set out in paragraph 1 and
(b) in particular, the minimum liquidity requirements for AIF which
redeem units
or shares more often than half-yearly.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 13
Investment in securitisation positions
In order to ensure cross-sectoral consistency and to remove
misalignment between the interest
of firms that repackage loans into tradeable securities and other
financial instruments
(originators) and
Alternative Investment Fund Managers (AIFM)that invest in these securities or other
financial instruments on behalf
of one or more AIF, the Commission shall adopt implementing measures
laying down the
requirements in the following areas:
(a) the requirements that need to be met by the originator in order
for an
Alternative Investment Fund Manager (AIFM) to
be allowed to invest in securities or other financial instruments of
this type
issued after 1 January 2011 on behalf of one or more AIF, including
requirements that ensure that the originator retains a net economic
interest of
not less than 5 per cent;
(b) qualitative requirements that must be met by
Alternative Investment Fund Managers (AIFM) which invest
in these
securities or other financial instruments on behalf of one or more
AIF.
Those measures, designed to amend to amend non-essential elements of
this Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with scrutiny
referred to in Article 49(3).
SECTION 2: CAPITAL REQUIREMENTS
Article 14
Initial and ongoing capital
Alternative Investment Fund Managers (AIFM) shall have own funds
of at least EUR 125 000.
Where the value of the portfolios of AIF managed by the
Alternative Investment Fund Managers (AIFM)
exceeds
EUR 250 million, the
AIFM shall provide an additional amount of own funds; that
additional amount of own funds
shall be equal to 0.02 % of the amount by which the value of the
portfolios of the AIFM
exceeds EUR 250 million.
Irrespective of the amount of the requirements set out in the first
and second subparagraphs, funds of the AIFM shall never be less than the amount
required under Article 21 of
Directive 2006/49/EC of the European Parliament and of the Council
of 14 June 2006 on the
capital adequacy of investment firms and credit institutions
(recast).
For the purposes of the first, second and third subparagraphs the
following portfolios shall be
deemed to be the portfolios of the AIFM:
(a) any AIF portfolios managed by the
Alternative Investment Fund Manager (AIFM), including AIF for which
the AIFM
has delegated one or more functions in accordance with Article 18;
(b) any AIF portfolios that the AIFM is managing under delegation.
SECTION 3: ORGANISATIONAL REQUIREMENTS
Article 15
General principles
Alternative Investment Fund Managers (AIFM) shall, at all times, use adequate and appropriate resources
that are necessary for the
proper performance of their management activities.
They shall have updated systems, documented internal procedures and
regular internal
controls of their conduct of business, in order to mitigate and
manage the risks associated with
their activity.
Article 16
Valuation
1.
Alternative Investment Fund Managers (AIFM) shall ensure that, for each AIF that it manages, a valuator
is appointed which
is independent of the AIFM to establish the value of assets acquired
by the AIF and
the value of the shares and units of the AIF.
The valuator shall ensure that the assets, shares and units are
valued at least once a
year, and each time shares or units of the AIF are issued or
redeemed if this is more
frequent.
2.
Alternative Investment Fund Managers (AIFM) shall ensure that the valuator has appropriate and
consistent procedures to
value the assets of the AIF in accordance with existing applicable
valuation standards
and rules, in order to reflect the net asset value of the shares or
units of the AIF.
3. The rules applicable to the valuation of assets and the
calculation of the net asset
value per unit or share of the AIF shall be laid down in the law of
the country where
the AIF is domiciled or in the AIF rules or instruments of
incorporation.
4. The Commission shall adopt implementing measures further
specifying the criteria
under which a valuator can be considered independent in the meaning
of paragraph
1.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 17
Depositary
1. For each AIF it manages, the
Alternative Investment Fund Manager (AIFM) shall ensure that a depositary
is appointed to
fulfil, where relevant, the following tasks:
(a) receive all payments made by investors when subscribing units or
shares of an
AIF managed by the AIFM and book them on behalf of the AIFM in a
segregated account;
(b) safe-keep any financial instruments which belong to the AIF;
(c) verify whether the AIF or the AIFM on behalf of the AIF has
obtained the
ownership of all other assets the AIF invests in.
2. An
Alternative Investment Fund Manager (AIFM) shall not act as depositary.
The depositary shall act independently and solely in the interest of
AIF investors.
3. The depositary shall be a credit institution having its
registered office in the
Community and be authorised in accordance with Directive 2006/48/EC
of the
European Parliament and Council of 14 June 2006 relating to the
taking up and pursuit of the business of credit institutions
(recast).
4. Depositaries may delegate their tasks to other depositaries.
5. The depositary shall be liable to the AIFM and the investors of
the AIF for any losses red by them as a result of its failure to perform its
obligations pursuant to this
Directive.
In case of any loss of financial instruments which the depositary
safe-keeps, the
depositary can only discharge itself of its liability if it can
prove that it could not
have avoided the loss which has occurred.
Liability to AIF investors may be invoked either directly or
indirectly through the
AIFM, depending on the legal nature of the relationship between the
depositary, the
AIFM and the investors.
The depositary's liability shall not be
affected by any
delegation referred to in paragraph 4.
SECTION 4: DELEGATION OF AIFM FUNCTIONS
Article 18
Delegation
1.
Alternative Investment Fund Managers (AIFM) which intend to delegate to third parties the task of
carrying out on their behalf
one or more of their functions shall request prior authorisation
from the competent
authorities of the home Member State for each delegation.
The following conditions have to be complied with:
(a) the third party must be creditworthy and the persons who
effectively conduct
the business must be of sufficiently good repute and sufficiently
experienced;
(b) where the delegation concerns the portfolio management or the
risk
management, the third party must also be authorised as an
Alternative Investment Fund Manager (AIFM)to
manage an
AIF of the same type;
(c) the delegation shall not prevent the effectiveness of
supervision of the AIFM,
and in particular it must not prevent the AIFM from acting, or the
AIF from
being managed, in the best interests of its investors;
(d) the
Alternative Investment Fund Manager (AIFM) must demonstrate that the third party is qualified and
capable of
undertaking the functions in question, that it was selected with due
care and
that the AIFM is in a position to monitor effectively at any time
the delegated
activity, to give at any time further instructions to the third
party and to
withdraw the delegation with immediate effect when this is in the
interest of
investors.
No delegation shall be given to the depositary, the valuator, or to
any other
undertaking whose interests may conflict with those of the AIF or
its investors.
The
Alternative Investment Fund Manager (AIFM) shall review the services provided by each third party on
an ongoing
basis.
2. In no case shall the AIFM's liability be affected by the fact
that the AIFM has
delegated functions to a third party, nor shall the AIFM delegate
its functions to the
extent that, in essence, it can no longer be considered to be the
manager of the AIF.
3. The third party may not sub-delegate any of the functions
delegated to it.
4. The Commission shall adopt implementing measures further
specifying the
following:
(a) the conditions for approving the delegation;
(b) the conditions under which the manager could no longer be
considered to be
the manager of the AIF as set out in paragraph 2.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Proposal for a Directive on Alternative Investment Fund Managers
Chapter IV
Transparency requirements
Article 19
Annual report
1. An
Alternative Investment Fund Manager (AIFM) shall, for each of the AIF it manages, make available an
annual report for
each financial year.
The annual report shall be made available to
investors and
competent authorities no later than four months following the end of
the financial
year.
2. The annual report shall at least contain the following:
(a) a balance-sheet or a statement of assets and liabilities;
(b) an income and expenditure account for the financial year;
(c) a report on the activities of the financial year;
3. The accounting information given in the annual report shall be
audited by one or
more persons empowered by law to audit accounts in accordance with
Directive
2006/43/EC of the European Parliament and of the Council of 17 May
2006 on
statutory audits of annual accounts and consolidated accounts,
amending Council
Directives 78/660/EEC and 83/349/EEC and repealing Council Directive
84/253/EEC21. The auditor's report, including any qualifications,
shall be reproduced
in full in the annual report.
4. The Commission shall adopt implementing measures further
specifying the content
and format of the annual report. These measures shall be adapted to
the type of
AIFM to which they apply.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 20
Disclosure to investors
1.
Alternative Investment Fund Managers (AIFM) shall ensure that AIF investors receive the following
information before they
invest in the AIF, as well as any changes thereof:
(a) a description of the investment strategy and objectives of the
AIF, all the assets
which the AIF can invest in and of the techniques it may employ and
of all
associated risks, any applicable investment restrictions, the
circumstances in
which the AIF may use leverage, the types and sources of leverage
permitted
and the associated risks and of any restrictions to the use of
leverage;
(b) a description of the procedures by which the AIF may change its
investment
strategy or investment policy, or both;
(c) a description of the legal implications of the contractual
relationship entered
into for the purpose of investment, including information on
jurisdiction,
applicable law and on the existence, or not, of any legal
instruments providing
for the recognition and enforcement of judgments on the territory
where the
fund is domiciled;
(d) the identity of the AIF's depositary, valuator, auditor and any
other service
providers and a description of their duties and the investors'
rights should any
failure arise;
(e) a description of any delegated management or depositary function
and the
identity of the third party to whom the function has been delegated;
(f) a description of the AIF's valuation procedure and, where
applicable, of the
pricing models for valuing assets, including the methods used in
valuing hard to
value assets;
(g) a description of the AIF's liquidity risk management, including
the redemption both in normal and exceptional circumstances, existing
redemption
arrangements with investors, and how the AIFM ensures a fair
treatment of
investors;
(h) a description of all fees, charges and expenses and of the
maximum amounts
thereof which are directly or indirectly borne by investors;
(i) whenever an investor obtains a preferential treatment or the
right to obtain
preferential treatment, the identity of the investor and a
description of that
preferential treatment;
(j) the latest annual report.
2. For each AIF an AIFM manages, it shall periodically disclose to
investors:
(a) the percentage of the AIF's assets which are subject to special
arrangements
arising from their illiquid nature;
(b) any new arrangements for managing the liquidity of the AIF;
(c) the current risk profile of the AIF and the risk management
systems employed
by the
Alternative Investment Fund Manager (AIFM) to manage these risks.
3. The Commission shall adopt implementing measures further
specifying the
disclosure obligations of AIFM and the frequency of the disclosure
referred to in
paragraph 2.These measures shall be adapted to the type of AIFM to
which they
apply.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 21
Reporting obligations to competent authorities
1.
Alternative Investment Fund Managers (AIFM) shall regularly report to the competent authorities of its
home Member State
on the principal markets and instruments in which it trades on
behalf of the AIF it
manages.
It shall provide aggregated information on the main instruments in
which it is
trading, markets of which it is a member or where it actively
trades, and on the
principal exposures and most important concentrations of each of the
AIF it
manages.
2. For each AIF an AIFM manages, it shall periodically report the
following to the
competent authorities of its home Member State:
(a) the percentage of the AIF's assets which are subject to special
arrangements
arising from their illiquid nature;
(b) any new arrangements for managing the liquidity of the AIF;
(c) the actual risk profile of the AIF and the risk management tools
employed by
the AIFM to manage these risks;
(d) the main categories of assets in which the AIF invested;
(e) where relevant, the use of short selling during the reporting
period.
3. For each of the AIF it manages the AIFM shall submit the
following documents to
the competent authorities of its home Member State:
(a) an annual report of each AIF managed by the AIFM for each
financial year,
within four months from the end of the periods to which it relates;
(b) a detailed list of all AIF which the AIFM manages for the end of
each quarter.
4. The Commission shall adopt implementing measures further
specifying the reporting
obligations referred to in paragraphs 1, 2 and 3 and their
frequency.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Proposal for a Directive on Alternative Investment Fund Managers
Chapter V
Obligations regarding AIFM managing specific types of AIF
SECTION 1: OBLIGATIONS FOR AIFM MANAGING LEVERAGED AIF
Article 22
Scope
This section shall apply only to
Alternative Investment Fund Managers (AIFM) which manage one or more AIF
employing high levels
of leverage on a systematic basis.
Alternative Investment Fund Managers (AIFM) shall assess on a quarterly basis whether the AIF employs high
levels of leverage on a
systematic basis and shall inform the competent authorities
accordingly.
For the purposes of the second subparagraph, an AIF shall be deemed
to employ high levels
of leverage on a systematic basis where the combined leverage from
all sources exceeds the
value of the equity capital of the AIF in two out of the past four
quarters.
Article 23
Disclosure to investors
Alternative Investment Fund Managers (AIFM) managing one or more AIF employing high levels of leverage on a
systematic basis
shall for each such AIF:
(a) disclose to investors the maximum level of leverage
which the AIFM may
employ on behalf of the AIF as well as any right of re-use of
collateral or any
guarantee granted under the leveraging arrangement;
(b) quarterly disclose to investors the total amount of leverage
employed by each
AIF in the preceding quarter.
Article 24
Reporting to competent authorities
1.
Alternative Investment Fund Managers (AIFM) managing one or more AIF employing high levels of leverage
on a systematic
basis shall regularly provide, to the competent authorities of its
home Member State,
information about the overall level of leverage employed by each AIF
it manages,
and a break-down between leverage arising from borrowing of cash or
securities and
leverage embedded in financial derivatives.
That information shall include the identity of the five largest
sources of borrowed
cash or securities for each of the AIF managed by the AIFM, and the
amounts of
leverage received from each of those entities for each of the AIF
managed by the
AIFM.
2. The Commission shall adopt implementing measures further
specifying the
disclosure requirements with regard to leverage and the frequency of
reporting to
competent authorities and of disclosure to investors.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 25
Use of information by competent authorities, supervisory cooperation
and limits to leverage
1. Member States shall ensure that the competent authorities of the
home Member State
use the information to be reported under Article 24 for the purposes
of identifying
the extent to which the use of leverage contributes to the build-up
of systemic risk in
the financial system or risks of disorderly markets
2. Home Member States shall ensure that all information received
under Article 24,
aggregated in respect of all AIFM that it supervises, are made
available to other
competent authorities through the procedure set out in Article 46 on
supervisory cooperation.
It shall, without delay, also provide information through this
mechanism,
and bilaterally to other Member States directly concerned, if an
AIFM under its
responsibility could potentially constitute an important source of
counterparty risk to
a credit institution or other systemically relevant institution in
other Member States.
3. In order to ensure the stability and integrity of the financial
system, the Commission
shall adopt implementing measures setting limits to the level of
leverage
Alternative Investment Fund Managers (AIFM) can
employ.
These limits should take into account, inter alia, the type
of AIF, their
strategy and the sources of their leverage.
Those measures designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
4. In exceptional circumstances and when this is required in order
to ensure the stability
and integrity of the financial system, the competent authorities of
the home Member
State may impose additional limits to the level of leverage that
Alternative Investment Fund Managers (AIFM) can employ.
Measures taken by the competent authorities of the home Member
States shall have a
temporary nature and should comply with the provisions adopted by
the Commission pursuant to paragraph 3.
SECTION 2: OBLIGATIONS FOR AIFM MANAGING AIF WHICH ACQUIRE
CONTROLLING INFLUENCE IN COMPANIES
Article 26
Scope
1. This section shall apply to the following:
(a)
Alternative Investment Fund Managers (AIFM) managing one or more AIF which either individually or in
aggregation
acquires 30 % or more of the voting rights of an issuer or of a
non-listed
company domiciled in the Community, as appropriate;
(b)
Alternative Investment Fund Managers (AIFM) having concluded an agreement with one or more other AIFM
which
would allow the AIF managed by these AIFM to acquire 30 % or more of
the
voting rights of the issuer or the non-listed company, as
appropriate.
2. This section shall not apply where the issuer or the non-listed
company concerned
are small and medium enterprises that employ fewer than 250 persons,
have an
annual turnover not exceeding 50 million euro
and/or an annual
balance sheet not
exceeding 43 million euro.
Article 27
Notification of the acquisition of controlling influence in
non-listed companies
1. Member States shall ensure that when an AIFM is in a position to
exercise 30 % or
more of the voting rights of a non-listed company, such
Alternative Investment Fund Managers (AIFM)
notifies the non-listed
company and all other share-holders the information provided in
paragraph 2.
This notification shall be made, as soon as possible, but not later
than four trading
days the first of which being the day on which the
Alternative Investment Fund Manager (AIFM) has reached
the position of
being able to exercise 30% of the voting rights.
2. The notification required under paragraph 1 shall contain the
following information:
(a) the resulting situation in terms of voting rights;
(b) the conditions under which the 30% threshold has been reached,
including
information about the identity of the different shareholders
involved;
(c) the date on which the threshold was reached or exceeded.
Article 28
Disclosure in case of acquisition of controlling influence in
issuers or non-listed companies
1. In addition to Article 27, Member States shall ensure that where
an AIFM acquires
30 % or more of the voting rights of an issuer or a non-listed
company, that AIFM
makes the information set out in the second and third subparagraphs
available to the
issuer, the non-listed company, their respective shareholders and
representatives of
employees or, where there are no such representatives, to the
employees themselves.
With regard to issuers, the AIFM shall make available the following
to the issuer
concerned, its shareholders and representatives of employees:
(a) the information referred to in Article 6(3) of Directive
2004/25/EC of the
European Parliament and of the Council of 21 April 2004 on takeover
bids22;
(b) the policy for preventing and managing conflicts of interests,
in particular
between the AIFM and the issuer;
(c) the policy for external and internal communication of the issuer
in particular as
regards employees.
With regard to non-listed companies, the AIFM shall make available
the following to
the non-listed company concerned, its shareholders and
representatives of
employees:
(d) the identity of the AIFM which either individually or in
agreement with other
AIFM have reached the 30 % threshold;
(e) the development plan for the non-listed company;
(f) the policy for preventing and managing conflicts of interests,
in particular
between the AIFM and the non-listed company;
(g) the policy for external and internal communication of the issuer
or non-listed
company, in particular as regards employees.
2. The Commission shall adopt implementing measures determining:
(a) the detailed content of the information provided under paragraph
1;
(b) the way the information shall be communicated.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 29
Specific provisions regarding the annual report of AIF exercising
controlling influence in
issuers or non-listed companies
1. Member States shall ensure that
Alternative Investment Fund Managers (AIFM) include in the annual report
provided for in
Article 19 for each AIF that they manage, the additional information
provided in
paragraph 2 of this Article.
2. The AIF annual report shall include the following additional
information for each
issuer and non listed company in which the AIF has invested:
(a) with regard to operational and financial developments,
presentation of revenue arnings by business segment, statement on the progress of
company's
activities and financial affairs, assessment of expected progress on
activities
and financial affairs, report on significant events in the financial
year;
(b) with regard to financial and other risks at least financial
risks associated with
capital structure;
(c) with regard to employee matters, turnover, terminations,
recruitment.
(d) statement on significant divestment of assets.
In addition, the AIF annual report shall, for each issuer in which
it has acquired a
controlling influence, contain the information provided for in point
(f) of Article
46a(1) of Fourth Council Directive 78/660/EEC of 25 July 1978 based
on Article 54
(3) (g) of the Treaty on the annual accounts of certain types of
companies23 and an
overview of the capital structure as referred to in points (a) and
(d) of Article 10(1)
of Directive 2004/25/EC.
For each non-listed company in which it has acquired a controlling
influence, the
AIF report shall provide an overview of management arrangements and
the
information provided for in points (b), (c) and (e) to (h) of
Article 3 of Second
Council Directive 77/91/EEC of 13 December 1976 on coordination of
safeguards
which, for the protection of the interests of members and others,
are required by
Member States of companies within the meaning of the second
paragraph of Article
58 of the Treaty, in respect of the formation of public limited
liability companies and
the maintenance and alteration of their capital, with a view to
making such
safeguards equivalent.
3. The AIFM shall, for each AIF it manages and for which it is
subject to this section,
provide the information referred to in paragraph 2 above to all
representatives of
employees of the company concerned referred to in paragraph 1 of
Article 26 within
the period referred to in Article 19 (1)
4. The Commission shall adopt implementing measures specifying the
detailed content
of the information to be provided under paragraphs 1 and 2.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 30
Specific provisions regarding companies whose shares are no longer
admitted to trading on a
regulated market
Where, following an acquisition of 30 % or more of the voting rights
of an issuer, the shares
of that issuer are no longer admitted to trading on a regulated
market, it shall nevertheless
continue to comply with its obligations under Directive 2004/109/EC
for two years from the
date of withdrawal from the regulated market.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter VI
Provision of management and marketing services by AIFM
Article 31
Marketing of shares or units of AIF in the home Member State
1. An authorised
Alternative Investment Fund Managers (AIFM) may market shares or units of AIF to
professional investors in
the home Member State as soon as the conditions laid down in this
Article are met.
2. The
Alternative Investment Fund Manager (AIFM) shall submit a notification to the competent authorities
of its home
Member State in respect of each AIF that it intends to market.
That notification shall comprise the following:
(a) identification of the AIF it intends to market and information
on where the AIF
are domiciled;
(b) the AIF rules or instruments of incorporation;
(c) a description of, or any information on the AIF available to
investors;
(d) information on the arrangements established to prevent units or
shares of that
AIF from being marketed to retail investors, including in the case
where the
Alternative Investment Fund Manager (AIFM) relies on activities of independent entities to provide
investment services
in respect of its AIF.
3. No later than ten working days after receipt of a complete
notification pursuant to
paragraph 2, the competent authorities of the home Member State
shall inform the
AIFM whether it may start marketing the AIF identified in the
notification referred to
in paragraph 2.
Subject to the implementing measures referred to in the third
subparagraph, the
competent authorities may impose restrictions or conditions on the
marketing of AIF
pursuant to this Article.
The Commission shall adopt implementing measures specifying the
types of
restrictions or conditions that can be imposed on the marketing of
AIF pursuant to
the second subparagraph of this paragraph.
Those measures, designed
to amend nonessential
elements of this Directive by supplementing it, shall be adopted in
accordance with the regulatory procedure with scrutiny referred to
in Article 49(3).
4. Without prejudice to Article 32(1), Member States shall ensure
that AIF managed by
AIFM are only marketed to professional investors.
Article 32
Option for Member States to allow the marketing of AIF to retail
investors
1. Member States may allow the marketing of AIF to retail investors
in their territory.
Member States may for that purpose impose stricter requirements on
AIFM or the
AIF.
2. Member States that permit the marketing of AIF to retail
investors on their territory,
shall, within one year of the date referred to in Article 54(1)
inform the Commission
of:
(a) the types of AIF which AIFM may market to retail investors on
their territory;
(b) any additional requirements that the Member State imposes for
the marketing
of AIF to retail investors on their territory.
Member States shall also inform the Commission of any subsequent
changes with
regard to the first subparagraph.
Article 33
Conditions for marketing in other Member States
1. Where an authorised
Alternative Investment Fund Manager (AIFM) intends to market to professional
investors the units or
shares of an AIF it manages in another Member State, it shall submit
the following
documents to the competent authorities of its home Member State:
(a) a notification letter, including a programme of operations
identifying the AIF it
intends to market and information on where the AIF are domiciled;
(b) the AIF rules or instruments of incorporation;
(c) a description of, or any information on the AIF available to
investors;
(d) the indication of the Member State in which it intends to market
the units or
shares of an AIF under its management to professional investors;
(e) arrangements made for the marketing of AIF and, where relevant,
information
on the arrangements established to prevent units or shares of that
AIF from
being marketed to retail investors.
2. The competent authorities of the home Member State shall, no
later than ten working
days after the date of receipt of the complete documentation,
transmit the complete
documentation referred to in paragraph 1 to the competent
authorities of the Member
State where the AIF will be marketed.
They shall enclose an
attestation that the
AIFM concerned is authorised.
3. Upon transmission of the documentation, the competent authorities
of the home
Member State shall without delay notify the AIFM about the
transmission.
The
AIFM may start the marketing of AIF in the host Member State as of
the date of that
notification.
4. Arrangements referred to in point (e) of paragraph 1 shall be
subject to the laws and
supervision of the host Member State.
5. Member States shall ensure that the notification letter and the
attestation referred to
in paragraph 1 are provided in a language customary in the sphere of
international
finance.
Member States shall ensure that electronic transmission and filing
of the documents
referred to in paragraph 2 is accepted by their competent
authorities.
6. In the event of a change in any of the particulars communicated
in accordance with
paragraph 2, an AIFM shall give written notice of that change to the
competent
authorities of its home Member State at least one month before
implementing the
change.
The competent authorities of the home Member State shall without
delay inform the
competent authorities of the host Member State of those changes.
7. The Commission shall, in accordance with the procedure referred
to in Article 49(2),
adopt implementing measures specifying the following:
(a) the form and content of a standard model of the notification
letter;
(b) the form and content of a standard model of attestation.
8. AIFM may only market shares or units of an AIF domiciled in a
third country to
professional investors domiciled in another Member State than the
home Member
State of the AIFM as from the date referred to in the second
subparagraph of Article
54(1).
Article 34
Conditions for providing management services in other Member States
1. Member States shall ensure that an authorised
Alternative Investment Fund Manager (AIFM) may provide
management
services in relation to an AIF domiciled in another Member State
either directly or
via the establishment of a branch, provided that the AIFM is
authorised to manage
that type of AIF.
2. Any AIFM wishing to provide management services in relation to an
AIF domiciled
in another Member State for the first time shall communicate the
following
information to the competent authorities of its home Member State:
(a) the Member State in which it intends to provide management
services directly
or establish a branch;
(b) a programme of operations stating in particular the services
which it intends to
perform and identifying the AIF it intends to manage.
3. If the
Alternative Investment Fund Manager (AIFM) intends to establish a branch, it shall provide, in
addition to paragraph 2,
the following information:
(a) the organisational structure of the branch;
(b) the address in the home Member State from which documents may be
obtained;
(c) the names of persons responsible for the management of the
branch.
4. The competent authorities of the home Member State shall, no
later than ten working
days after the date of receipt of the complete documentation,
transmit the complete
documentation referred to in paragraph 2, and where relevant 3, to
the competent
authorities of the Member State where the management services will
be provided and
an attestation that they have authorised the AIFM concerned.
They
shall immediately
notify theAlternative
Investment Fund Manager (AIFM) about the transmission.
Upon receipt of the transmission notification the AIFM may start to
provide its
services in the host Member State.
5. The host Member States shall not impose any additional
requirements on the AIFM
concerned in respect of the matters covered by this Directive.
6. In the event of a change in any of the particulars communicated
in accordance with
paragraph 2, and where relevant 3, an AIFM shall give written notice
of that change
to the competent authorities of its home Member State at least one
month before
implementing the change.
The competent authority of the home Member State shall inform the
competent
authority of the host Member State of those changes.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter VII
Specific rules in relation to third countries
Article 35
Conditions for the marketing in the Community of AIF domiciled in
third countries
An
Alternative Investment Fund Manager (AIFM) may only market shares or units of an AIF
domiciled in a
third country to
professional investors domiciled in a Member State, if the third
country has signed an
agreement with this Member State which fully complies with the
standards laid down in
Article 26 of the OECD Model Tax Convention and ensures an effective
exchange of
information in tax matters.
Where AIFM market shares or units of AIF domiciled in a third
country the home Member
States may prolong the period referred to in Article 31(3), when
this is necessary to check
whether the conditions of this Directive are met.
Before allowing AIFM to market shares or units of AIF domiciled in a
third country, the Member State shall have particular regard to the arrangements
made by the AIFM in
accordance with Article 38, where relevant.
Article 36
Delegation by the AIFM of administrative tasks to an entity
established in a third country
Member States shall only allow an
Alternative Investment Fund Manager (AIFM)to delegate administrative
services to entities
established in a third country, provided that all of the following
conditions are met:
(a) the requirements set out in Article 18 are fulfilled;
(b) the entity is authorised to provide administration services or
registered in the
third country in which it is established and is subject to
prudential supervision;
(c) there is an appropriate co-operation agreement between the
competent
authority of the AIFM and the supervisory authority of the entity.
Article 37
Valuator established in a third country
1. Member States shall only allow the appointment of a valuator
established in a third
country, provided that all of the following conditions are met:
(a) the requirements set out in Article 16 are fulfilled;
(b) the third country is the subject of a decision taken pursuant to
paragraph 3
stating that the valuation standards and rules used by valuators
established on
its territory are equivalent to those applicable in the Community.
2. The Commission shall adopt implementing measures specifying the
criteria for
assessing the equivalence of the valuation standards and rules of
third countries as
referred to in paragraph (1) (b).
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
3. On the basis of the criteria referred to in paragraph 2, the
Commission shall, in
accordance with the procedure referred to in Article 49(2), adopt
implementing
measures, stating that the valuation standards and rules of a third
country legislation
are equivalent to those applicable in the Community.
Article 38
Delegation of the depositary tasks in respect of AIF domiciled in
third countries
1. By way of derogation from Article 17(4), in respect of AIF
domiciled in a third
country Member States shall allow the depositary of that AIF
appointed in
accordance with Article 17 to delegate the performance of one or
more of its
functions to a sub-depositary domiciled in the same third country
provided that the
legislation of that third country is equivalent to the provisions of
this Directive and is
effectively enforced.
The following conditions shall also be met:
(a) the third country is the subject of a decision taken pursuant to
paragraph 4
stating sub-depositaries domiciled in that country are subject to
effective
prudential regulation and supervision which is equivalent to the
provisions laid
down in Community law;
(b) co-operation between the home Member State and the relevant
authorities of
the third country is sufficiently ensured;
(c) the third country is the subject of a decision taken pursuant to
paragraph 4
stating that the standards to prevent money laundering and terrorist
financing
are equivalent to those laid down in Community law.
2. The depositary's liability towards investors shall not be
affected by the fact that it has
delegated to a third country depositary the performance of all or a
part of its tasks.
3. The Commission shall adopt implementing measures specifying the
criteria for
assessing the equivalence of the prudential regulation, supervision
and standards of
third countries as referred to in paragraph 1.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
4. On the basis of the criteria referred to in paragraph 3, the
Commission shall, in
accordance with the procedure referred to in Article 49(2), adopt
implementing
measures, stating that prudential regulation, supervision and
standards of a third
country are equivalent to this Directive.
Article 39
Authorisation of AIFM established in third countries
1. Member States may authorise, in accordance with this Directive,
Alternative Investment Fund Managers (AIFM) established
in a third country to market units or shares of an AIF to
professional investors in the
Community under the conditions of this Directive, provided that:
(a) the third country is the subject of a decision taken pursuant to
paragraph 3 (a)
stating that its legislation regarding prudential regulation and
on-going
supervision is equivalent to the provisions of this Directive and is
effectively
enforced;
(b) the third country is the subject of a decision taken pursuant to
paragraph 3 (b)
stating that it grants Community AIFM effective market access
comparable to
that granted by the Community to AIFM from that third country;
(c) the AIFM provides the competent authorities of the Member State
in which it
applies for authorisation with the information referred to in
Articles 5 and 31 ;
(d) a cooperation-agreement between the competent authorities of
that Member
State and the supervisor of the
Alternative Investment Fund Managers (AIFM)
exists which ensures an
efficient
exchange of all information that are relevant for monitoring the
potential
implications of the activities of the AIFM for the stability of
systemically
relevant financial institutions and the orderly functioning of
markets in which
the AIFM is active.
(e) the third country has signed an agreement with the Member State
in which it
applies for authorisation which fully complies with the standards
laid down in
Article 26 of the OECD Model Tax Convention and ensures an effective
exchange of information in tax matters.
2. The Commission shall adopt implementing measures aimed at
establishing:
(a) general equivalence criteria for the equivalence and effective
enforcement of
third country legislation on prudential regulation and on-going
supervision,
based on the requirements laid down in Chapters III, IV and V.
(b) general criteria for assessing whether third countries grant
Community AIFM
effective market access comparable to that granted by the Community
to AIFM
from those third countries.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
3. On the basis of the criteria referred to in paragraph 2, the
Commission shall, in
accordance with the regulatory procedure referred to in Article
49(2), adopt
implementing measures stating:
(a) that the legislation on prudential regulation and ongoing
supervision of AIFM rd country is equivalent to this Directive and effectively
enforced;
(b) that a third country grant Community AIFM effective market
access at least
comparable to that granted by the Community to AIFM from that third
country.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter VIII
Competent authorities
SECTION 1: DESIGNATION, POWERS AND REDRESS PROCEDURES
Article 40
Designation of competent authorities
Member States shall designate the competent authorities which are to
carry out the duties
provided for in this Directive.
Where a Member State designates several competent authorities it
shall inform the
Commission thereof, indicating any division of duties.
Article 41
Powers of competent authorities
1. Competent authorities shall be given all supervisory and
investigatory powers that
are necessary for the exercise of their functions. Such powers shall
be exercised in
any of the following ways:
(a) directly;
(b) in collaboration with other authorities;
(c) under their responsibility by delegation to entities to which
tasks have been
delegated;
(d) by application to the competent judicial authorities.
2. The competent authorities shall have at least the following
powers of investigation:
(a) have access to any document in any form and to receive a copy of
it;
(b) require information from any person and if necessary to summon
and question
a person with a view to obtaining information;
(c) carry out on-site inspections with or without prior
announcements;
(d) require records of telephone and data traffic.
Article 42
Supervisory powers
1. The home Member State shall ensure that the competent authorities
may take the
following measures:
(a) impose a temporary prohibition of professional activity;
(b) take appropriate measures to ensure that
Alternative Investment Fund Managers (AIFM) continue to comply
with the
relevant legislation;
(c) refer matters for criminal prosecution to the competent
jurisdictions.
2. Member States shall ensure that the competent authorities have
the powers necessary
to take all measures required in order to ensure the orderly
functioning of markets in
those cases where the activity of one or more AIF in the market for
a financial
instrument could jeopardise the orderly functioning of that market.
Article 43
Administrative sanctions
1. Without prejudice to the procedures for the withdrawal of
authorisation or to the
right of Member States to impose criminal sanctions, Member States
shall ensure, in
conformity with their national law, that the appropriate
administrative measures can
be taken or administrative sanctions be imposed against the persons
responsible
where the provisions adopted in the implementation of this Directive
have not been
complied with.
Member States shall ensure that these measures are
effective,
proportionate and dissuasive.
2. Member States shall provide that the competent authority may
disclose to the public
any measure or sanction that will be imposed for infringement of the
provisions
adopted in the implementation of this Directive, unless such
disclosure would
seriously jeopardise the financial markets or cause disproportionate
damage to the
parties involved.
Article 44
Right of appeal
Member States shall provide that any decision taken under laws,
regulations or administrative
provisions adopted in accordance with this Directive is properly
reasoned, communicated to
the addressee, and is the subject of the right of appeal to the
courts.
That right to appeal to the courts shall apply also where, in
respect of an application for
authorisation which provides all the information required, no
decision is taken within two
months of the submission of the application.
SECTION 2
CO-OPERATION BETWEEN DIFFERENT COMPETENT AUTHORITIES
Article 45
Obligation to co-operate
1. The competent authorities of the Member States shall co-operate
with each other
whenever necessary for the purpose of carrying out their duties
under this Directive
or of exercising their powers under this Directive or under national
law.
2. Member States shall facilitate the co-operation provided for in
this section.
3. Competent authorities shall use their powers for the purpose of
co-operation, even in
cases where the conduct under investigation does not constitute an
infringement of
any regulation in force in that Member State.
4. The competent authorities of the Member States shall immediately
supply one
another with the information required for the purposes of carrying
out their duties
under this Directive.
5. The Commission shall, in accordance with the procedure referred
to in Article 49(2),
adopt implementing measures relating to the procedures for exchange
of information
between competent authorities.
Article 46
Exchange of information relating to the potential systemic
consequences of AIFM activity
1. The competent authorities responsible for the authorisation and
supervision of AIFM
under this Directive shall communicate information to the competent
authorities of
other Member States where this is relevant for monitoring and
responding to the
potential implications of the activities of individual AIFM or AIFM
collectively for
the stability of systemically relevant financial institutions and
the orderly functioning
of markets on which AIFM are active.
The Committee of European
Securities
Regulators (CESR) established by Commission Decision 2009/77/EC of
23 January
200925 shall also be informed and shall forward this information to
the competent
authorities of the other Member States.
2. Aggregated information relating to the activities of
Alternative Investment Fund Managers (AIFM) under
its responsibility
shall be communicated on a quarterly basis by the competent
authority of the AIFM
to the Economic and Financial Committee established by Article
114(2) of the EC
Treaty.
3. The Commission shall adopt implementing measures specifying the
modalities,
content and frequency of the information to be exchanged pursuant to
paragraph 1.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 47
Co-operation in supervisory activities
1. The competent authorities of one Member State may request the
co-operation of the
competent authorities of another Member State in a supervisory
activity or for an on the
spot verification or in an investigation on the territory of the
latter within the
framework of their powers pursuant to this Directive.
Where a competent authority receives a request with respect to an
on-the-spot
verification or an investigation, it shall perform one of the
following:
(a) carry out the verification or investigation itself;
(b) allow the requesting authority to carry out the verification or
investigation;
(c) allow auditors or experts to carry out the verification or
investigation.
2. In the case referred to in paragraph 1(a) the competent authority
of the Member State
which has requested co-operation, may ask that members of its own
personnel assist
the personnel carrying out the verification or investigation.
The
verification or
investigation shall, however, be the subject of the overall control
of the Member
State on whose territory it is conducted.
In the case referred to in paragraph 1(b) the competent authority of
the Member State
on whose territory the verification or investigation is carried out
may request that
members of its own personnel assist the personnel carrying out the
verification or
investigation.
3. Competent authorities may refuse to exchange information or to
act on a request for
co-operation in carrying out an investigation or on-the-spot
verification only in the
following cases:
(a) an investigation, on-the-spot verification or exchange of
information might
adversely affect the sovereignty, security or public order of the
Member State
addressed;
(b) judicial proceedings have already been initiated in respect of
the same actions
and the same persons before the authorities of the Member State
addressed;
(c) final judgment has already been delivered in the Member State
addressed in
respect of the same persons and the same actions.
The competent authorities shall inform the requesting competent
authorities of any
decision taken under the first subparagraph, stating the reasons
therefore.
4. The Commission shall adopt implementing measures concerning
procedures for on the
spot verifications and investigations.
Those measures, designed, to amend non-essential elements of this
directive by
supplementing it shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 48
Mediation
1. The Committee of European Securities Regulators (CESR) shall
establish a
mediation mechanism.
2. In case of disagreement between competent authorities on an
assessment, action or
omission of one of the competent authorities concerned under this
Directive,
competent authorities shall refer the matter to the CESR, where
discussion will take
place in order to reach a rapid and effective solution.
The
competent authorities shall
duly consider the advice of the CESR.
Proposal for a Directive on Alternative Investment Fund Managers
Chapter IX
Transitional and final provisions
Article 49
Committee
1. The Commission shall be assisted by the European Securities
Committee established
by Commission Decision 2001/528/EC of 6 June 2001 establishing the
European
Securities Committee.
2. Where reference is made to this paragraph, Articles 5 and 7 of
Council Decision
1999/468/EC of 28 June 1999 laying down the procedures for the
exercise of
implementing powers conferred on the Commission shall apply, having
regard to the
provisions of Article 8 thereof.
The period laid down in Article 5(6) of Decision 1999/468/EC shall
be set at three
months.
3. Where reference is made to this paragraph, Article 5a(1) to (4)
and Article 7 of
Decision 1999/468/EC shall apply, having regard to the provisions of
Article 8
thereof.
Article 50
Review
Two years after the date referred to in Article 54, the Commission
shall, on the basis of public
consultation and in the light of the discussions with competent
authorities, review the
application and the scope of this Directive.
This review shall also
take due account of
developments at international level and
discussions with third
countries
and international
organisations.
It shall submit a report to the European Parliament and the Council
together with appropriate
proposals.
Article 51
Transitional provision
AIFM operating in the Community before [the deadline for the
transposition of this Directive]
shall adopt all necessary measures to comply with this Directive and
shall submit an
application for authorisation within one year of the deadline for
the transposition of this
Directive.
Article 52
Amendment of Directive 2004/39/EC
The following indent is added in Article 19(6) of Directive
2004/39/EC:
"- the service does not relate to an AIF within the meaning of
Article 3(a) of [Directive
xx/xx/EC"].
Article 53
Amendment of Directive 2009/…/EC27
Directive 2009/XX EC shall be amended as follows:
The following new Article 50a shall be inserted:
"In order to ensure cross-sectoral consistency and to remove
misalignment between the
interest of firms that 'repackage' loans into tradeable securities
and other financial instruments
(originators) and UCITS that invest in these securities or other
financial instruments, the
Commission shall adopt implementing measures laying down the
requirements in the
following areas:
(a) the requirements that need to be met by the originator in order
for a UCITS to
be allowed to invest in securities or other financial instruments of
this type
issued after 1 January 2011, including requirements that ensure that
the
originator retains a net economic interest of not less than 5 per
cent;
(b) qualitative requirements that must be met by UCITS which invest
in these
securities or other financial instruments.
Those measures, designed to amend this Directive by supplementing
it, shall be adopted in
accordance with the regulatory procedure with scrutiny referred to
in Article 107(2)."
Article 54
Transposition
1. Member States shall bring into force the laws, regulations and
administrative
provisions necessary to comply with this Directive by […] at the
latest.
They shall
forthwith communicate to the Commission the text of those provisions
and a
correlation table between those provisions and this Directive.
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