The European Parliament and the Council of the European Union have adopted and officially published on 26 March 2024 the (EU) 2024/927 Directive (AIFMD II Directive), amending Directives 2011/61/EU and 2009/65/EC.
The AIFM II Directive introduces a comprehensive overhaul aimed at enhancing the regulatory framework for Alternative Investment Funds (AIFs) across the Union. With a focus on loan origination, liquidity risk management, depositary activities, and delegation arrangements, the directive’s updates are poised to reshape fund management practices.
Key regulatory updates include :
▪ Loan originating AIFs: New stipulations impose requirements and restrictions on AIFs engaged in loan origination, aiming to standardise practices and mitigate associated risks.
▪ Liquidity risk management: New rules mandate specific liquidity management practices for open-ended funds, as well as the adoption of liquidity management tools by AIFMs of open-ended AIFs, measuring the impact of liquidity in fund structuring and the need to safeguard investors’ interests.
▪ Cross-border access to depositary services : Competent authorities may authorise the appointment of a depositary from another Member State in order to prevent the lack of competitive supply of depositary services in certain markets.
▪ Extension of delegation requirements: When seeking authorization, AIFMs and UCITS management companies must provide details concerning their delegation arrangements, which will also be subject to reporting requirements.
▪ Enhanced disclosure and reporting: AIFMs will encounter additional disclosure and reporting obligations, aimed at increasing transparency for investors and regulators.
As Luxembourg is required to transpose AIFMD II into national law within the next two years, the grand duchy’s pivotal role in the global fund industry emphasises the importance of timely and effective implementation.
We invite our clients and partners to engage with us for a detailed discussion on the potential impact of the AIFMD II Directive on their operations. Our fund administration team is led by Amélie Frontain, Xavier Hamori and Jérôme GEIER.
Read the directive here : https://lnkd.in/g8wcmdbY
The European Parliament and the Council of the European Union have adopted and officially published on 26 March 2024 the (EU) 2024/927 Directive (AIFMD II Directive), amending Directives 2011/61/EU and 2009/65/EC.
The AIFM II Directive introduces a comprehensive overhaul aimed at enhancing the regulatory framework for Alternative Investment Funds (AIFs) across the Union. With a focus on loan origination, liquidity risk management, depositary activities, and delegation arrangements, the directive’s updates are poised to reshape fund management practices.
Key regulatory updates include :
▪ Loan originating AIFs: New stipulations impose requirements and restrictions on AIFs engaged in loan origination, aiming to standardise practices and mitigate associated risks.
▪ Liquidity risk management: New rules mandate specific liquidity management practices for open-ended funds, as well as the adoption of liquidity management tools by AIFMs of open-ended AIFs, measuring the impact of liquidity in fund structuring and the need to safeguard investors’ interests.
▪ Cross-border access to depositary services : Competent authorities may authorise the appointment of a depositary from another Member State in order to prevent the lack of competitive supply of depositary services in certain markets.
▪ Extension of delegation requirements: When seeking authorization, AIFMs and UCITS management companies must provide details concerning their delegation arrangements, which will also be subject to reporting requirements.
▪ Enhanced disclosure and reporting: AIFMs will encounter additional disclosure and reporting obligations, aimed at increasing transparency for investors and regulators.
As Luxembourg is required to transpose AIFMD II into national law within the next two years, the grand duchy’s pivotal role in the global fund industry emphasises the importance of timely and effective implementation.
We invite our clients and partners to engage with us for a detailed discussion on the potential impact of the AIFMD II Directive on their operations. Our fund administration team is led by Amélie Frontain, Xavier Hamori and Jérôme GEIER.
Read the directive here : https://lnkd.in/g8wcmdbY
