On 18 August 2020, ESMA wrote to the European Commission, highlighting areas to consider during the forthcoming review of the Alternative Investment Fund Managers Directive (“AIFMD”).
ESMA recognises that the AIFMD has provided a solid framework for alternative investment funds in Europe since 2011. However, ESMA thinks that they, and the national competent authorities, have gained experience of the framework and have identified areas that could be improved to enhance the supervision of alternative fund managers in Europe.
ESMA's letter includes recommendations for changes in 19 areas including, harmonizing the AIFMD and UCITS regimes, delegation and substance (including more specific requirements on white-label service providers), liquidity-management tools, a new category of investors called “semi-professional investors”, leverage, the AIFMD reporting regime, the harmonization of supervision of cross-border entities and clarification on the reverse solicitation.
Many of the recommendations made also require consideration of changes to the UCITS legislative framework.
Annex I to the letter sets out ESMA’s recommendations to the legislative framework currently in place and recommendations regarding the reporting regime are made in Annex II.
ESMA encourages the European Commission to support the areas identified in the letter in order to improve the effectiveness and soundness of the AIFMD.
The next step in the AIFMD review process is a public consultation, which is planned to be launched during autumn 2020.