Proposals on a Bailiwick of Guernsey opt in AIFMD equivalent regime for Guernsey Licensed Fund Managers and Depositaries.
This consultation paper is the second of the two planned Commission consultations to facilitate the requirements of Directive 2011/61/EU on Alternative Investment Fund Managers (“the Directive or "AIFMD”) into the local regulatory regime so as to enable regulated entities flexibility in their product strategy with respect to fund management and marketing business within the European Economic Area ("EEA") in which the Directive has been implemented. Although a European Union directive, AIFMD is also to be implemented in due course by Iceland, Liechtenstein and Norway, therefore reference is made to the EEA.
The first consultation and subsequent introduction of The AIFMD (Marketing) Rules, 2013 was designed to ensure that collective investment schemes and fund managers established in the Bailiwick of Guernsey who wish to market into the EEA meet the requirements of Articles 42 and 43 of the Directive. Whilst recognising that some entities will fall outside the scope of the Directive, from July 2013, local entities will be permitted to market non-EEA funds to investors in Member States through the Member States’ private placement regimes, as long as they fulfil certain transparency requirements and disclosures and regulatory co-operation arrangements are concluded between the Commission and the EEA securities regulators in accordance with Article 42 of the Directive.
What is Proposed? - Opt in Regime
This consultation paper relates to the second part of the Bailiwick’s AIFMD focussed regime, being an AIFMD opt in regime for Guernsey fund managers and depositaries whose activities are caught by AIFMD. Those licensed fund managers and depositaries who wish to be subject to The AIFMD Rules 2013 will be able to apply to the Commission by using Form GAIFM and Form DAIFM. Once the Commission has considered the application it is proposed that The AIFMD Rules, 2013 will be imposed as a condition on the licence of the respective fund manager or depositary. It is hoped that The AIFMD Rules, 2013 will become effective from 2 January 2014. However, ultimately it will be a commercial decision for AIFMs and depositaries based in Guernsey whether or not to opt into this regime.
Rationale for change
AIFMD provides for an EEA passport for non-EEA AIFMs. This passport could potentially be applicable from 2015 or 2016. The principle of the passport is that, in order to enjoy the same rights, non-EEA AIFMs should comply with the same obligations, which means that non-EEA AIFMs will be able to benefit from the EEA passport so long as they abide by the rules of the AIFMD. Whilst the Bailiwick of Guernsey does not need to put in place an AIFMD equivalent regime to allow a Guernsey fund manager to apply to a nominated EEA Member State of Reference, the Commission understands that a Guernsey AIFMD equivalent regime may assist in this application process.
Furthermore, at the time of publication of this consultation paper, the implementation of AIFMD across the whole of the EEA is unclear. Potentially some EEA Member States may require a non-EEA AIFM to be AIFMD equivalent in order to market into their territory under its respective national private placement regime. Accordingly the Commission considers that The AIFMD Rules, 2013 may assist in this respect.
Please provide any comments on the draft version of The AIFMD Rules, 2013 and draft Form AIFM and draft form DAIFM to [email protected] by close of business on 18 October 2013. A feedback statement covering the substantive issues raised by respondents will be issued by the Commission following the close of the consultation period.
Meeting on 24 September 2013
As part of the consultation process a meeting is to be held on Tuesday 24 September 2013 at St James Concert & Assembly Hall at 5pm at which Carl Rosumek, Director of Investment Supervision and Policy Division, will present an overview of the draft rules and describe aspects of their practical implementation. Carl will also provide feedback on our experience of The AIFMD (Marketing) Rules, 2013. Following his presentation Carl will be joined in a panel question and answer session by members of the joint Commission and industry working group which participated in the drafting of The AIFMD Rules, 2013. Some of the questions posed will come from the consultation paper however; the panel will also welcome questions from the floor, both in advance and on the day. If you have any questions for submission in advance of the event or would like to register your attendance, and have not already done so, please email Sue Martin ([email protected]) by close of business on 13 September 2013.