13 September 2011

ALFI response to the ESMA consultation on possible implementing measures of the AIFMD

In summary, ALFI would like to highlight the following key points:

Directive for depositary regime

ALFI would like to take the occasion of the present response to stress once again the importance of having the level 2 provisions relating to depositary adopted by way of a Directive and not by way of a regulation. The Directive is indeed the unique EU legislative instrument which will enable the Member States to consider when transposing the Directive, the broad range of funds and of funds managers acting on their own territory, and the specificities of their own market practices.

Prime broker

With respect to the provisions on prime brokers and in order to avoid any discussions when applying those provisions, ALFI strongly recommends ESMA to confirm that in the event of appointment of a prime broker, all the assets received by such prime broker will be considered as “other assets” subject to recordkeeping obligations by the depositary and not subject to custody obligations.

Level 2 provisions should not go beyond the Level 1 text

ALFI has identified some points in the Consultation where the suggested advice from ESMA goes beyond the level 1 text. Given that the scope of the advice to be delivered by the EU Commission is determined and restricted by the Level 1 text, they believe that the present consultation should not exceed the level 1 provisions.

Alignment with UCIT and Proportionality

For consistency and efficiency, ALFI recommends ESMA to align the AIFM provisions on risk, liquidity management and delegation with the UCITS framework. ALFI also welcomes the fact that ESMA has confirmed its willingness to introduce proportionality. Both the Consultation and their responses recognise that due the variety of funds (type, size, specificities…), the one size fits all approach is not appropriate.

Full response

© ALFI - Association of the Luxembourg Fund Industry