The European Securities and Markets Authority (ESMA) has launched a consultation on guidelines on key concepts of the Alternative Investment Fund Managers Directive (AIFMD).

The Directive provides the legal framework for both alternative investment funds (AIFs) and their managers (AIFMs).
 
ESMA’s draft guidelines are aimed at clarifying the rules applicable to hedge funds, private equity and real estate funds. These proposals help to clarify what entities fall under the remit of the AIFMD, thereby providing for consistent application of the provisions throughout the EU. In order to achieve this, the guidelines set out the criteria for what is considered to be:
 
•         A collective investment undertaking;
•         Capital raising;
•         Defined investment policy; and
•         The number of necessary investors.
 
The draft guidelines will contribute to the creation of a level playing field in the area of AIFs.
 
ESMA has also issued a consultation on Draft regulatory technical standards on types of AIFMs, which are aimed at ensuring the uniform application of the AIFMD across the EU.  These standards distinguish between managers of AIFs whose investors have the right to redeem their shares at least annually (open-ended AIFs), and those whose investors have less frequent redemption rights.
 
Both papers follow an earlier discussion paper published by ESMA in February. For some of the issues covered in that paper, which are not addressed in the consultations published today, ESMA will take into account the Commission’s Level 2 implementing measures before deciding on the appropriate next steps.
 
The closing date for responses to these consultations is 1 February 2013.  The Guidelines and Technical Standards will be finalised in the first half of 2013.

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