ESMA’s AIFMD passport regime update was ‘inconclusive', says Tim Thornton, Chief Data Officer, MUFG Fund Services…
ESMA’s update on the functioning of the AIFMD passport regime and the potential for extension to third party AIFMs was viewed as inconclusive, but there were some positives for non-EU managers to take from the guidance.
ESMA has recognised that difficulties caused by divergent approaches and interpretations between jurisdictions indicate that the extension of passporting would be helpful. This is encouraging as the divergence in approach remains a big issue for non-EU managers and funds.
Non-EU managers and funds require jurisdiction by jurisdiction compliance, which can be a cumbersome and expensive process, and many are still waiting for a solution. ESMA has showed intent in assessing that Guernsey, Jersey and Switzerland (subject to some changes) are ready for passport extensions.
However, only six jurisdictions were assessed. While ESMA has stated its intent to continue to assess jurisdictions over the coming months, for many non-EU managers this will be considered slow progress.
The industry is in need of swift, definitive solutions that provide clarity, but this is unlikely for the foreseeable future. Those jurisdictions that have received approval from ESMA now face a wait for agreement from the European Commission, Parliament and Council. Outside of Guernsey, Jersey and Switzerland it is very much as you were.
