08 July 2013

Hedgeweek: Guernsey now accepting AIFMD applications

Fiona Le Poidevin, Chief Executive of Guernsey Finance, writes that Guernsey is now accepting applications under new domestic AIFMD marketing rules and therefore it is a case of 'business as usual' for Guernsey's investment fund community.

The Guernsey Financial Services Commission (GFSC) issued domestic Alternative Investment Fund Managers Directive (AIFMD) marketing rules, together with a notification form and confirmed they are able to accept applications prior to 22 July 2013. Amending its domestic rules and the provision of guidance signals that Guernsey is well advanced in being able to continue to offer access to EU markets in view of the AIFMD coming into force on 22 July this year.

By virtue of not being in the EU, Guernsey managers strictly do not need to comply with the AIFMD and the main route to the EU market will continue to be under National Private Placement (NPP). However, post 22 July 2013, in order to continue under this route, AIFMD imposes certain regulatory obligations, i.e. the requirements of Articles 42 and 43, which must be fulfilled. Therefore, the forms are for Guernsey-based managers to apply to the GFSC – essentially a notification process – outlining in which EU (and wider EEA) countries they will market each fund. 

Guernsey will offer a dual regime. It will have an AIFMD offering for those EU investors and managers who need or choose to take this route and at the same time maintain its existing regime for those who fall outside the scope of AIFMD or are able to take advantage of NPP regimes. This reflects the fact that Guernsey always strives to provide the best solutions for the truly global client base of the Guernsey investment fund industry.

This readiness for the Directive is reflected in Guernsey’s practical implementation of the rules. Of particular note with regard to depositary functions, the GFSC’s FAQs state that there are no changes to the paperwork to apply for either a new licence or an extended licence.

The momentum continues as a consultation is expected shortly on the full AIFMD equivalent opt-in rules which Guernsey will introduce in due course. These opt-in rules may allow bilateral marketing of an Alternative Investment Fund (AIF) product to certain EU Member States prior to the implementation of a third country passport regime.

The European Commission is expected to implement the full passporting regime for non-EU managers of alternative funds in July 2015. The Directive provides the framework to establish the passporting regime but until this is implemented and operating effectively Guernsey Alternative Investment Fund Managers (AIFMs) will continue to market under NPP subject to any additional regulatory reporting under the domestic rules of each Member State.

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