Private fund managers that currently or may in the future market private funds to investors in the European Union (“EU”) should be aware that the deadline for EU Member States to implement the EU’s Alternative Investment Fund Managers Directive (the “AIFMD”) is July 22, 2013, although some EU Member States have extended the implementation deadline for certain managers until July 22, 2014 (see below).
Once the AIFMD is effective, non-EU based private fund managers that are “alternative investment fund managers” (“AIFMs”) will need to comply with certain reporting and disclosure requirements in order to actively market funds (“alternative investment funds” or “AIFs”) to EU investors under the national private placement regimes. Furthermore, the ability of a non-EU AIFM to rely on an EU jurisdiction’s private placement regime may be dependent on compliance with additional requirements specific to such jurisdiction, which may include notice filings and/or registration with such jurisdiction’s regulators. Non-EU AIFMs that limit marketing activities in EU jurisdictions exclusively to “reverse inquiry” or “passive marketing”, as defined by each jurisdiction, will not be required to comply with the AIFMD.
Certain EU Member States, most notably the UK, are implementing transitional provisions to extend the deadline for compliance with such jurisdiction’s AIFMD requirements, subject to certain conditions. Specifically under the UK’s transitional provisions, certain non-EU AIFMs may postpone compliance with applicable reporting, disclosure and notification requirements of the UK’s AIFMD regulation until July 22, 2014. A non-EU AIFM may rely on the UK’s transitional provisions if it managed an AIF and marketed the AIF in a European Economic Area State prior to July 22, 2013. An AIFM that meets the requirements to rely on the UK’s transitional provisions with respect to an existing AIF may also rely on the transitional provisions to market new AIFs in addition to its existing AIFs under the UK’s private placement regime until July 22, 2014. Eligible AIFMs will not be required to take any action in order to benefit under the transitional provisions.
For more information relating to the AIFMD, please contact your primary Investment Management Group attorney at Seward & Kissel LLP or refer to the accompanying more detailed memorandum, the Top Ten Things Every US Hedge Fund Manager should know about AIFMD, jointly prepared with our investment management alliance partner, Simmons & Simmons LLP.
