The newly revised AIFM Directive tightens debt fund oversight, mandates liquidity tools, and eases cross-border depositary appointments.
The European Parliament’s adoption of the revised AIFM Directive on 7 February 2024 marks a pivotal moment for the European investment funds industry, building on the Directive’s foundation laid in 2011 and its Luxembourg law transposition in 2013.
This amendment, spurred by the European Commission’s 2021 proposal, aims to enhance the European capital market, strengthen investor protection, and align requirements with the UCITS Directive.
Key reforms include more stringent regulations for loan-originating AIFs to mitigate financial and systemic risks; and tighten the delegation model, ensuring better supervision, conflict of interest management, and accurate notifications to authorities.
The Directive allows appointing depositaries from another Member State under specific conditions, recognising the lack of presence of depositaries in certain Member States. It also mandates AIFMs to implement at least two liquidity management tools and dedicated procedures. Reporting obligations for AIFMs shall be expanded, covering the entire range of managed markets and instruments.
Expected to take effect in Luxembourg by 2026, these changes shall foster a more resilient and transparent European financial ecosystem.
As AIFMs and UCITS management companies are gearing up to align with these regulatory changes, Value Partners remains ready to guide clients through this transition and reconfigure operations to comply with new regulatory demands, facilitating a seamless shift to the evolving regulatory framework.
The newly revised AIFM Directive tightens debt fund oversight, mandates liquidity tools, and eases cross-border depositary appointments.
The European Parliament’s adoption of the revised AIFM Directive on 7 February 2024 marks a pivotal moment for the European investment funds industry, building on the Directive’s foundation laid in 2011 and its Luxembourg law transposition in 2013.
This amendment, spurred by the European Commission’s 2021 proposal, aims to enhance the European capital market, strengthen investor protection, and align requirements with the UCITS Directive.
Key reforms include more stringent regulations for loan-originating AIFs to mitigate financial and systemic risks; and tighten the delegation model, ensuring better supervision, conflict of interest management, and accurate notifications to authorities.
The Directive allows appointing depositaries from another Member State under specific conditions, recognising the lack of presence of depositaries in certain Member States. It also mandates AIFMs to implement at least two liquidity management tools and dedicated procedures. Reporting obligations for AIFMs shall be expanded, covering the entire range of managed markets and instruments.
Expected to take effect in Luxembourg by 2026, these changes shall foster a more resilient and transparent European financial ecosystem.
As AIFMs and UCITS management companies are gearing up to align with these regulatory changes, Value Partners remains ready to guide clients through this transition and reconfigure operations to comply with new regulatory demands, facilitating a seamless shift to the evolving regulatory framework.
