Bureaucracy in the member states again the obstacle for long due strong European Hedge Funds

Michel Barnier, Vice-President of the EC in charge of Internal Market and Services and Industry and Entrepreneurship (pro term), seated, reading documents (EC Audiovisual Services, 1/07/2014)

Michel Barnier, Vice-President of the EC in charge of Internal Market and Services and Industry and Entrepreneurship (pro term), seated, reading documents (EC Audiovisual Services, 1/07/2014)

It has been a rough week for the European hedge funds industry. The deadline (22/07/2014) for the implementation date of the Alternative Investment Fund Managers Directive (AIFMD) has well passed and many fund managers ran to apply at the very last moment. Now it is time for the national authorities to review the applications and report whether they comply with the rules of the directive.

More regulation for EU hedge funds, better financial system

Everything began with the severity of the global financial crisis. There has been a gap in the European legislation regarding the protection of the investment public of the hedge funds and the private equity funds. Thus, a directive was introduced in April 2009 in order to provide a comprehensive regulatory framework for the EU Alternative Investment Fund Managers (AIFMs). The first level of the directive was finalized on 21 July 2011 but the first agreement contained several implementation issues which needed the attention of the European bodies.

After the technical support of the European Securities and Markets Authority (ESMA), the European Commission (EC) proposed the second level of the directive at the end of 2012. The date to implement these regulations into national law by the Member States was set on 22 July 2013 or 22 July 2014 in the case of European Union Member States using a one-year transitional period.

In short, this directive is assigned to regulate EU and non-EU fund managers who manage Alternative Investment Funds (AIFs) that are established or not in the EU. This means that EU managers will have to follow detailed rules on delegation, remuneration, leverage and reporting and separate their risk management and evaluation operations. Furthermore, when an EU fund manager will be granted authorization under the AIFMD, then a passport will be given to him to either manage AIFs in other EU countries or market shares in AIFs to professional investors. As far as non-EU fund managers are concerned, they must always acquire a passport in order to market shares in AIFs within the EU but that is going to take place at the beginning of 2015.

Funds not ready for AIFMD

Even if there has been done much work , there are some Member States that haven’t fully or at all complied with the rules of the AIFMD. The global hedge fund industry association known as the Alternative Investment Management Association (AIMA) commented on this: “This is hindering managers’ ability to do business and means that investors in certain countries may be prevented from accessing alternative investment fund”. But there are cases where even if managers in European countries are in line with the directive, they face delays in the procedure of being authorized by the national regulators. And this comes at a cost for managers who cannot reach investors in these countries.

AIFMD: a way for European economic improvement

It is clear that the EC is at the right path to set rules that can enhance the way hedge funds are functioning with regards to investors’ protection. The fact that the timeframe of the AIFMD shows that we are still in the middle of this journey sounds even more promising. However, the Commission needs to be vigilant because there can always appear implementation problems that could spoil the whole project and that could be at the greater cost of investors.






the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

What are plastics and why do they matter? An explainer

Autumn 2018 Economic Forecast: sustained but less dynamic growth amid high uncertainty

Deadly violence at Israel-Gaza border escalates dangerously: UN chief condemns in strongest terms

Here’s how business needs to change for a new decade

Quality of air in Bucharest-Romania: is it fog or is it smog?

A good night’s sleep ‘washes’ your brain, scientists say

Deutsche Bank chased away from US, threatened with more fines

Gender equality and medicine in the 21st century: an equity unachieved

10 predictions for the global economy in 2019

Children suffering ‘atrocities’ as number of countries in conflict hits new peak: UNICEF

Republic of Korea President proposes DMZ as future ‘peace and cooperation district’ on Peninsula

Climate change and health: creating global awareness and using earth resources wisely

Zuckerberg, a paella, and the mighty EU questionnaires that would stop Whatsapp acquisition by Facebook?

COP21 Breaking News: Paris Pact on Water and Climate Change Adaptation Announced

EU investment budget for 2020: A boost for the climate

Four in five adolescents failing to exercise for even 60 minutes a day, UN health agency warns

Brexit: when the hubris of one man can set the UK, the EU and the entire world on fire

International community urged to deliver on promise for better future for Bosnia and Herzegovina

Trump’s blasting win causes uncertainty and turbulence to the global financial markets

#TwitterisblockedinTurkey and so is Erdogan

Eurozone officials play with people’s deposits and minds

South Sudan: €48.5 million in additional EU humanitarian aid

Migration policy affects attractiveness of OECD countries to international talent

Is your business model fit for the Fourth Industrial Revolution?

The global suicide rate is growing – what can we do?

Mobile young people create the European labour market of tomorrow

UN condemns attack that leaves one ‘blue helmet’ dead in Central African Republic

French elections: by the time the EU economy revives and the migration crisis is solved extremists could take over Europe

OECD joins with Japan to fight financial crime by establishing new academy

‘Deteriorating’ human rights in Belarus amounts to ‘wholescale oppression’: UN expert

Irish Presidency: Not a euro more for EU budgets

‘Cataclysmic events’ in Hiroshima, Nagasaki, began ‘global push’ against nuclear weapons says Guterres, honouring victims

JADE May Meeting last call for participants – join us in Zagreb

MasterCard at European Business Summit 2015: A focus on innovation will drive inclusive economic growth for Europe

Zero carbon buildings are possible following these four steps

EU elections 2019: Rise of nationalist trends and populism in Europe challenges the EU edifice

DR Congo: Ebola response resumes despite ‘risky environment’

How to prevent a suicide?

At COP24, countries agree concrete way forward to bring the Paris climate deal to life

Reconciliation helps ‘repair fractures’, enable lasting peace, Security Council hears

5G will change the world – but who will keep it safe?

Tackling ‘deeply worrying’ global rise in anti-Semitism is a job for all societies everywhere, says UN chief

My experience living with depression and schizophrenia in Thailand

Smart devices must come with trust already installed

How trade wars pose a threat to the global economy

Catalonia’s vote for independence and the power of symbols

‘A global measles crisis’ is well underway, UN agency chiefs warn

European Accessibility Act: Parliament and Council negotiators strike a deal

The ECB still protects the banks at the expense of the EU taxpayers

‘Violence, atrocities and impunity’ reign throughout Libya, ICC prosecutor tells UN Security Council

Rising landmine blast toll in Afghanistan highlights long-term care needs of survivors

Corporate tax remains a key revenue source, despite falling rates worldwide

IMF’s Lagarde to Peoples of the world: You have to work more for the banks!

Mozambique pledging conference hopes to soften devastating blow of back-to-back cyclones

The Sahel is engulfed by violence. Climate change, food insecurity and extremists are largely to blame

Businesses, governments and consumers to implement a more climate-friendly approach to #BeatPlasticPollution on World Environment Day 2018

G20 LIVE: “Re-envisioning the economy to enable women to reach their full potential” live from Antalya Turkey

This chart shows the fall in coal-power plants being planned around the world

As many as 330,000 displaced by heavy fighting in south-west Syria – UN agency

Countries must up their game to reduce low birth weights, warns UN-backed report

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s