The establishment of a regulated alternative investment industry in Europe took a major step forward with the publication of the European Commission's so-called "Level 2 measures" to supplement certain elements of the Alternative Investment Fund Manager Directive (AIFMD).
Marc Saluzzi, chairman of ALFI, says: “The publication of the ‘Level 2’ measures finally allows a three year-long painful legislative process to near completion. The development of a regulated alternative investment fund industry in Europe is nearing reality.”
The measures published cover:
Cconditions and procedure for the determination and authorisation of alternative investment fund managers (AIFMs), including the capital requirements applicable to AIFMs;
Operating conditions for AIFMs, including rules on remuneration, conflicts of interest, risk management, liquidity management, investment in securitisation positions, organisational requirements, rules on valuation;
Conditions for delegation;
Rules on depositaries, including the depositary's tasks and liability;
Reporting requirements and leverage calculation;
Rules for cooperation arrangements.
A key measure of the AIFMD involves the introduction of a European passport for alternative investment fund managers who wish to access the entire European market. Given Luxembourg’s position as the European leader in the cross-border space, ALFI expects that implementation of the AIFMD will further enhance Luxembourg as a leading domicile for fund and management companies in the alternative sector.
ALFI believes that two major features of the draft law are likely to present a particular interest to the alternative investment fund community. First, the creation of a limited partnership structure, which will add a flexible and secure partnership structure to Luxembourg’s fund product offering and which might be particularly appealing to investors familiar with such a structure based on the anglo-saxon model. Second, the draft Bill provides for additional clarifications regarding the taxation regime of the carried interest.
© ALFI - Association of the Luxembourg Fund Industry
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