On 10 June 2020, the European Commission published its report assessing the application and the scope of Directive 2011/61/EU of the European Parliament and of the Council on alternative investment fund managers (the “AIFMD”). The European Commission assessed whether the specific rules of the AIFMD are effective, efficient, coherent and relevant, and if they supported EU measures to achieve the general, specific and operational objectives of the AIFMD. The report highlights both the benefits and deficiencies of the AIFMD's central measures with regard to selected areas and may be summarised as follows:
Impact on alternative investment fundS (“AIFs”) and alternative investment fund managers (“AIFMs”)
- TOP: access to national markets had increased due to the AIFMD.
- FLOP: the efficacy of the EU AIFM passport is impaired by national gold-plating, divergences in the national marketing rules, varying interpretations of the AIFMD by national supervisors, its limited scope (limited to professional investors) and the non-activation of certain measures such as the AIFMD third-country passport.
Impact on investors
- TOP: (i) an increase of the sales of AIFs with greater participation of retail investors because of the introduction of a dedicated regime regulating functions and liability of depositaries, (ii) a general improvement of the AIFs asset valuation process and (iii) an improvement of the communication of information, especially concerning the transparency regarding the offered products and services.
- FLOP: (i) a lack of clarity regarding AIFMs using tri-party collateral management or central securities depositories acting as custodians and (ii) a lack of a depositary passport.
Impact on monitoring and assessment of systemic risk
- TOP: generally, the tool-kit for financial stability purposes available to national competent authorities under the AIFMD was considered to be useful and to have had positive effects;
- FLOP: nevertheless, these measures could be improved and require a certain degree of harmonisation in order to be in line with similar regimes in force.
Impact of rules on investment in private companies and in or for the benefit of developing countries
- TOP: The AIFMD could be amended to better accommodate the private equity sector by removing unnecessary charges and looking for more effective ways to protect non-listed companies or issuers.
- FLOP: There is insufficient evidence to determine the impact of the AIFMD on investing in or for the benefit of developing countries. However, the AIFMD does not appear to impose regulatory restrictions that would hinder such investments.