AIFMD’s significant implications for investment managers and funds both within and outside the EU are:
- Passporting effect of AIFs located in the EU across all member states (to professional investors)
- Authorization requirements for marketing services
- Restrictions on marketing to retail investors
- Detailed reporting and disclosure requirements.
- Additional authorization requirements for Non EU managers and non EU funds
- Minimum capital requirements of AIF managers of €125,000
- Restrictions and requirements for leveraged investments
*For an AIFM seeking to raise investment in the EU, the advantage of being able to passport in the EU is almost certain to outweigh any reasons for establishing an AIF outside the EU, due to the restriction the AIFMD is about to bring. This undoubtedly offers a competitive advantage to Cyprus over other Non-EU fund jurisdictions and interest has already started to mount in that respect.
The passporting regime of management companies across the EU applies to UCITS managers only and not to management companies of other types of funds such as the AIF’s. So UCITS managers, which also manage non UCITS local funds, will have no passport under the UCITS IV Directive for the non UCITS part of their activity. This is where the AIFMD steps in and provides the passport for the non UCITS activities making it possible to consolidate management remotely; at least in certain instances (the AIFMD (Non-UCITS) passport is only available for sales to professional investors).
