ISC launch AIFMD Compliance Healthcheck Service

The Alternative Investment Fund Managers Directive (AIFMD) became effective in July 2013 giving firms with funds in scope until 22nd July 2014 to gain authorisation. These timeframes were very challenging for many impacted firms, as some had not previously been required to gain fund authorisation, whereas others had large or complex fund ranges. This meant updating fund documentation, processes and added transparency reporting. This all needed establishing in a very short period. Some of these processes would need to be continued regularly beyond initial authorisation, such as transparency reporting, which led to selection decisions following the route of least resistance.

Now that many of the reporting and review processes have undergone a number of iterations, it is prudent to reconsider the original decisions made. The market has matured with many of the European countries confirming their own specific requirements. There has been no information from either the European Securities and Markets Authority (esma), or any of the National Competent Authorities (NCA) as to the penalties for non-compliance or if any AIFMs are not complying. This lack of information is likely to lead to complacency as firms focus elsewhere, seeing AIFMD as a done deal with repercussions unknown. There have been regular “question and answers” updates from esma as to how some aspects of the regulation should be interpreted. However, these are not based on any of the operating models or data submitted, as these have not been reviewed as part of a themed visit. As with movies, so with regulations there is likely to be a sequel, so in preparation the ISC Healthcheck will ensure readiness for AIFMD II.