EFAMA members believe that the AIFMD is an effective and balanced regime for the regulation of AIF Managers. The framework has improved the monitoring of risk to the financial system and the cross-border raising of capital for investments in alternative assets.
The European Fund and Asset
Management Association (EFAMA) has
published today its response to the European Commission’s public consultation on the review of
the Alternative Investment Fund Managers Directive (AIFMD).
EFAMA
members believe that the AIFMD is an effective and balanced
regime for the regulation of AIF Managers. The framework has
improved the monitoring of risk to the financial system and the
cross-border raising of capital for investments in alternative
assets. Following the introduction of the Directive which came
into effect in 2011, AIF
Managers are now operating with greater transparency for
investors and supervisors, helping build confidence in
financial markets.
“Investment funds
will play a pivotal role in the post-pandemic economic recovery
and in the further development of the Capital Markets Union. The
AIFMD is one of the pillars of EU regulation for investment
funds and it has stood the test of time! It has delivered on
its objectives, setting a high standard of harmonisation in the alternative
investment fund management sector, while ensuring a high level
of investor protection” explained Tanguy
van de Werve, EFAMA Director General.
Against
this backdrop, EFAMA advocates for limited amendments to the framework.
The association calls on the European Commission to follow a
set of three overarching principles when reviewing AIFMD, to
ensure the framework is adequately revised without undermining
the robust foundations on which it currently stands:
Don’t try to fix something that is not broken: The
ongoing review of AIFMD should only be targeting clearly demonstrated
material shortcomings that cannot otherwise be addressed through
supervisory convergence or Level 2 harmonisation.
Keep the AIFMD a “manager” regulation:
The AIFMD was designed as a “manager” regulation, and not as a
“product” regulation. This is because the alternative investment fund
management sector is too diverse to include in a regulation
product-specific rules for each category of AIFs. National Competent
Authorities need to have the required flexibility to appropriately
supervise such a diverse universe.
Focus on supervisory & enforcement convergence:
Effective supervision and enforcement across Member States is as
important as ensuring consistency across national rules. EFAMA
encourages the European Commission to ensure that ESMA makes full use of
all the powers at its disposal (including enforcement powers at Level
4) to promote greater supervisory and enforcement convergence.
Commenting
on the recommended changes, Federico Cupelli, Senior Regulatory
Policy Advisor at EFAMA, said: “The
AIFMD facilitated the market integration of EU AIFs and we strongly
believe that only a few targeted amendments are necessary to
improve the effectiveness of AIFMD as a whole. With respect to the
introduction of a depositary passport, our views are resolutely
against such an option. We believe that the requirement for the
depositary to share the same domicile as the fund is an
important safeguard in the interest of investor protection. The AIFMD
also sets a very clear delegation framework establishing a
series of clear parameters against which a third-party could be
considered a “letter-box” entity. Such parameters are in our
view exhaustive enough, striking an optimal balance between the
twin objectives of investor protection and the preservation of
a management company’s need to structure its business as most
appropriate when serving its investors.”
“The Covid19-induced
market stress has demonstrated the resilience of the investment
management industry and has further reinforced EFAMA’s
longstanding view that the full set of Liquidity Management
Tools should be made available in all EU jurisdictions. We
would caution, however, against including restrictive
definitions or rules on the deployment of such tools under
stressed market conditions. It must always be at the discretion
of the manager of the fund. In addition, to
improve the monitoring and supervision of AIFM activities in
the EU, there are a number of opportunities for supervisory
authorities to address their own data-sharing practices, by
allowing more efficient sharing and cross-referencing of data
already provided by AIFMs through current reporting", added Chiara Sandon, Senior
Regulatory Policy Advisor at EFAMA.
The
full response to the consultation can be found 
here.
EFAMA
© EFAMA - European Fund and Asset Management Association
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