In a letter to the European Commission dated 18 August, the European Securities and Markets Authority (“ESMA”) highlights those areas of the Alternative Investment Fund Managers Directive (“AIFMD”) where it believes improvements could be made. Under the AIFMD, the European Commission is required to conduct a review of the AIFMD’s application after July 2017 and “that review shall analyse the experience acquired in applying this Directive, its impact on investors, AIFs or AIFMs, in the Union and in third countries, and the degree to which the objectives of this Directive have been achieved” (article 69). Under the AIFMD, the European Commission is required to “propose appropriate amendments” if and where necessary.

In the letter, ESMA explains that it has identified many areas of the AIFMD framework that could be improved as part of its review as well as following significant exchanges with National Competent Authorities. The recommendations also take into account recent COVID-10 related stresses.

ESMA notes that many of the recommendations would also require consideration of changes to the UCITS framework.

Annex I of the letter sets out the key issues in the legislative framework where ESMA recommends revisions and Annex II sets out more specifically the key reporting issues where improvements could be made.