Resources

AIFMD Forces Asset Managers to Focus on Their “True Intentions”

Date: November 7, 2013

As I travel through Europe meeting with asset managers, it is apparent that many are unprepared to face the challenges that AIFMD will impose across the financial services industry.

Asset managers must face the fact that they may need to temporarily close their Alternative business operations if they have not received approval by their respective local regulators.  The d-day is set for 22nd July 2014 with many asset managers still to file their applications and many more whose applications are currently under review by their regulators.

The application deadlines for the 3 main fund hubs in Europe are as follows:

Luxembourg – 1st April 2014
UK – 22nd Jan 2014
Ireland – 21st Feb 2014

Applications need to be received by the above dates if approval is to be granted by the 22nd of July.  If approval has not been granted, AIFMs will be required to cease operations until they have duly received authorisation.

With regulators sticking by their application dates and no opportunity for extensions, asset managers have been forced to react and focus on what their true intentions are by answering the 56 odd questions that are required to be completed as part of the application.  The “let’s wait and see approach” has resulted in asset managers having a shorter and narrower window to put everything in place by the end of the year; and seemingly being caught with their proverbial pants down by the regulators who have been very quick and ready to act on the AIFM Directive.  Today 15 asset managers have been approved by the FCA, 3 by the CSSF and the 4 by the CBI.

Speaking from a Luxembourg perspective, the early adopters in the market have been the larger well-known asset managers, with another 40 applications currently going through the process.  The first wave of these applicants are the Chapter 15 management companies that want to upgrade their status, closely followed by the private equity business sector in an effort to take advantage of the rules around remuneration and delegation.

Is there a flood of applicants looming on the horizon? I do believe the answer is yes, but will it still be too late for some.