By Ciara Davies

The European Commission has launched a consultation relating to its review of the Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”).

The Commission has published the consultation as part of its work on developing the capital markets union (CMU) and it follows a Commission report, issued in June 2020, on the application and scope of the AIFMD.

The Commission is consulting on potential changes to the AIFMD, which aim to strengthen the rules and complete the internal market for alternative investment funds.

The consultation comprises of the following:

• The first section focuses on the utility of the AIFM passport and the overall competitiveness of the EU AIF industry. The questions in this section on authorisation/scope, seek views from stakeholders on the scope of the AIFM licence, its potential extension to smaller AIFMs and level playing field concerns in relation to the regulation of other financial intermediaries e.g. MiFID firms, credit institutions or UCITS managers.
• An investor protection section taking account of the differences between retail and professional investors. Questions are raised on potential EU law pre-calibration of an AIF that would be suitable for marketing to retail customers; adequacy of disclosure requirements; alleged ambiguities in the depositary regime and lack of depositary passport; and potential improvements to the AIFMD rules on valuation.
• A section dedicated to international issues, which also focuses on the issue of a level playing field.
• A section on financial stability seeks stakeholder views on how to ensure NCAs and AIFMs have the necessary tools to mitigate and deal with systemic risks.
• The rules on investment in private companies are examined with a view to making improvements.
• A sustainability section seeking input on how the alternative investment sector can participate in responsible investment and preservation of the planet.
• The penultimate section covers UCITS, including the question of a single licence for AIF and UCITS managers and more harmonised metrics for leverage calculation and reporting on the use of liquidity management tools.
• The final section invites stakeholders to raise other AIFMD issues and submit proposals for the improvement of the AIFMD legal framework.

The Commission invites replies via its online questionnaire by 29 January 2021.