The European Securities and Markets Authority (ESMA) launched a call for evidence on 7 November 2014 to gather input from EU and non-EU stakeholders on key issues that affect the anticipated extension of the AIFMD passport to non-EU AIFMs and to EU AIFMs marketing non-EU AIFs. This starts the next phase of implementation for AIFMD. Under the current regime, non-EU AIFMs and EU AIFMs of non-EU AIFs can only market their funds into member states where permitted by national private placement laws. The purpose of this call for evidence is to consider whether to extend the passporting regime beyond just EU AIFs managed by EU AIFMs.
In the meantime, the status quo remains such that marketing in Europe by non-EU AIFMs and by EU AIFMs marketing non-EU AIFs is done using the private placement regimes – where there are a wide range of different, complex and in some cases still evolving requirements that may apply, depending on the circumstances.
ESMA’s paper invites the EU asset management industry and investors to share their experiences and observations on cross-border marketing under AIFMD in relation to the passport and the private placement regimes; and the interaction between the two. Responses to ESMA’s paper are required by 8 January 2015. We would be happy to assist our clients and contacts in issuing a composite response on behalf of those who would prefer not to submit named responses.
ESMA will produce an opinion and advice (as required by the AIFMD) to the European Council, Parliament and Commission by 22 July 2015. It will consider feedback received during the course of the call for evidence in producing that opinion. The opinion and advice will address: (i) the functioning of the management and/or marketing passport for EU AIFMs in respect of EU AIFs; (ii) the functioning of management and/or marketing of AIFs by non-EU AIFMs and EU AIFMs marketing non-EU AIFs using the private placement regimes; and (iii) whether or not the passporting regime should be extended to the management and/or marketing of AIFs by non-EU AIFMs and to EU AIFMs marketing non-EU AIFs.
If ESMA does give positive advice and opinions, the European Commission will then have up to three months, ie by 22 October 2015, to issue a delegated act specifying the date when the AIFMD rules on the passport extension will apply. ESMA will not treat all non-EU countries as a single block, so only those that satisfy the criteria in the AIFMD will benefit from the proposed passport extension. The AIFMD envisages a dual regime operating from the introduction of an expanded passporting regime. This would mean that AIFMs to which the marketing passport could apply can either become authorised to use the passport or continue to use the private placement regimes (until, subject to ESMA’s opinion, these are compulsorily phased out in 2018).