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AIFMD Countdown:. Level Two Is Here. AIFMD Countdown:. Timetable Recap. AIFMD became EU law on 21 July 2011 Must be implemented by 22 July 2013 Transitional period until July 2014. Timetable Recap . Published on 19 December 2012 Have ‘direct effect’

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aifmd countdown

AIFMD Countdown:

Level Two Is Here

aifmd countdown1

AIFMD Countdown:

Timetable Recap

timetable recap
AIFMD became EU law on 21 July 2011

Must be implemented by 22 July 2013

Transitional period until July 2014

Timetable Recap
level 2 regulations
Published on 19 December 2012

Have ‘direct effect’

Contain wide ranging implementing measures

Level 2: Regulations
scope and authorisation
Scope and Authorisation
  • Do you manage AIFs?
  • Can you rely on any exemptions?
    • de minimis?
    • delegate only?
aifmd countdown3

AIFMD Countdown:

Key Impact –Marketing Funds in Europe

timetable marketing
Timetable – Marketing

Changes to national private placement regimes?

Directive in force (P)

2011

2012

2013

2014

2015

2016

2017

2018

EU AIF marketed by EU AIFM obtain passport

EU AIF managed by non-EU AIFM and Non-EU AIF obtain passport?

No more private placements?

IF ESMA make positive recommendation, and requisite implementing legislation is passed

marketing by asian managers in europe
Marketing by Asian managers in Europe

Non-EU AIFM marketing 2013-2015

  • Member states may allow if:
    • The AIFM complies with the AIFMD’s disclosure, reporting and transparency requirements and with requirements on control of non-listed companies
    • Its home state meets the cooperation requirements
  • Member States may impose stricter rules...
marketing summary
Marketing summary

EU Funds with EU AIFMs

Non-EU Funds or EU Funds with Asian AIFMs

Implementation date. Passports made available to EU AIFMs for EU Funds.

Private placement only

Dual marketing system – EU passport or private placement

Extension of passports to non-EU AIFMs and non-EU AIFs.

Dual marketing system – EU passport or private placement

ESMA to review the passport regime. Possible end of national private placement regime.

Passport only ?

Passport only ?

18794858_1.PPTX

transparency
Transparency

New disclosure requirements:

  • Impact on fund documents and IR?
  • Who will deliver compliance?
aifmd countdown4

AIFMD Countdown:

Key Impact – Delegation

delegation
Delegation
  • What is your current delegation structure?
  • Is it compliant?
    • e.g. “third country” issues
    • Delegation by EU AIFM to non-EU sub-manager
    • Delegation by non-EU AIFM to EU sub-manager
  • Letter box entities
delegation1
Delegation

Primary Manager

Fund

Sub-manager

?

or

AIFM

?

aifmd countdown5

AIFMD Countdown:

What EU AIFMs are facing over the short term, and Asian managers may face in the long term…

aifmd countdown6

AIFMD Countdown:

Key Impact Areas –Organisational changes

general operating principles 1
General Operating Principles (1)
  • What are “operating conditions”?
  • Derived from operating conditions for MiFID and UCITS managers – so reflect compliance policies, such as best execution and personal account dealing
  • Some obligations relate to the AIF itself, and not the AIFM
general operating principles 2
General Operating Principles (2)
  • Quality and commitment of governing body/personnel
  • No “undue costs” charged to investors
  • Fair treatment of investors
  • Due diligence requirements
  • Appointment of prime brokers and counterparties
organisational matters conflicts of interest
Organisational Matters – Conflicts of Interest
  • AIFM/MiFID investment managers/UCITS management companies convergence – business as usual?
  • Key features of conflicts policy
  • Disclosure and internal reporting
  • Impact on personnel structures
  • AIF voting rights
organisational matters risk management
Organisational Matters – Risk Management
  • Tracks equivalent requirements for MiFID investment managers and UCITS management companies
  • What does “functional and hierarchical separation” mean?
organisational matters liquidity management
Organisational Matters – Liquidity Management
  • A new requirement under AIFMD
  • Match portfolio liquidity to redemption profile and counterparty commitments
  • Guidance on liquidity measurement arrangements, liquidity limits and use of redemption gates and other liquidity management tools
  • Guidance for funds of funds
organisational matters internal procedures and valuation
Organisational Matters – Internal Procedures and Valuation
  • Internal business arrangements
  • Data processing and record keeping
  • Permanent compliance/Internal audit functions
  • Personal transactions
  • Valuation/Calculation of NAV
  • Use of models/Frequency of valuation/Professional guarantees for external valuers
aifmd countdown7

AIFMD Countdown:

Key Impact Areas –Depositary and Other Issues

immediate concerns for eu aifms 2015 concern for asian aifms
Immediate concerns for EU AIFMs – 2015 concern for Asian AIFMs
  • Depositary provisions
  • Transparency and disclosure requirements
  • Other
depositary
Depositary
  • Who?
  • New prime broker model?
  • Impact on pricing?
  • Re-domicile onshore funds offshore?
other issues
Other Issues
  • Remuneration
  • Private Equity Restrictions
  • Leveraged Funds

... and more!

slide27

QUESTIONS?

abigail.bell@dechert.com

gus.black@dechert.com

christopher.gardner@dechert.com

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