AIFMD passport: Europe must try harder

2016 ◽  
Vol 17 (2) ◽  
pp. 10-16 ◽  
Author(s):  
Stephen Sims ◽  
Patrick Brandt ◽  
Greg Norman
Keyword(s):  
Financial Services ◽  
Investment Fund ◽  
Cayman Islands ◽  
Content Type ◽  
Fund Managers ◽  
Private Placement ◽  
The Us ◽  
Near Future ◽  
The Eu ◽  
Alternative Investment

Purpose To explain two papers published by the European Securities and Marketing Authority (ESMA) covering the application of the mar-keting “passport” under the Alternative Investment Fund Managers Directive (AIFMD). Design/methodology/approach Explains ESMA’s first paper, containing an advice to the European Parliament, Council and Commission (collectively the Trilogue) on the potential application of the AIFMD passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative in-vestment Funds (AIFs), and a second paper, containing ESMA’s opinion on the current functioning of the AIFMD (currently used by EU AIFMs marketing EU AIFs in the EU) and National Private Placement Regimes (NPPRs, used for marketing by non-EU AIFMs and non-EU AIFs). Findings The ESMA papers were disappointing because they gave far less guidance and encouragement than anticipated that AIFs located in major jurisdictions such as the US and the Cayman Islands will be any easier to market to EU professional investors in the near future. Practical implications AIFMs (both inside and outside the EU) who are already using, or intending to use, the NPPRs should take some comfort that it seems highly unlikely that these regimes will be removed in the near future. Originality/value Practical guidance from experienced financial services lawyers.

European private placements for US managers – navigating the AIFMD minefield

2014 ◽  
Vol 15 (4) ◽  
pp. 25-28
Author(s):  
Winston Penhall ◽  
Jacqui Hatfield
Keyword(s):  
Investment Fund ◽  
Member States ◽  
Content Type ◽  
Fund Managers ◽  
Eu Member States ◽  
Private Placement ◽  
Private Placements ◽  
Practical Implications ◽  
Insight Into ◽  
The Eu

Purpose – The article sets out the practical implications of the EU Alternative Investment Fund Managers Directive for USA managers with a focus on the marketing provisions of AIFMD. Design/methodology/approach – This article summarises key marketing issues for USA managers. Findings – The article addresses in particular the means by which USA fund managers who are not regulated in the EU can access EU investors including passive marketing. Practical implications – AIFMD grants EU member states latitude when implementing their local private placement regime. Some EU member states have not yet implemented AIFMD while others have imposed conditions that are so onerous that in practical terms they equate to the negation of private placement as an option. Originality/value – The article is of value to USA fund managers who are not regulated in the EU because it provides insight into the practicalities of navigating the minefield that is AIFMD.

The international strength of the euro will grow

2021 ◽  
Keyword(s):  
Euro Area ◽  
Financial Services ◽  
Raw Materials ◽  
Domestic Demand ◽  
Content Type ◽  
The Us ◽  
Us Dollar ◽  
Strategic Autonomy ◽  
Geopolitical Risks ◽  
The Eu

Significance The proposals identified areas where the euro could potentially become more dominant, such as the issuance of green bonds, digital currencies, and international trade in raw materials and energy. Ambitions to enhance the international leverage of the euro are being driven by the aim to strengthen EU strategic autonomy amid rising geopolitical risks. Impacts Developing its digital finance sector would be an opportunity for the EU to enhance its strategic autonomy in financial services. Challenging the US dollar would require the euro-area to rebalance its economy away from foreign to domestic demand. Member state division will prevent the economic reconfiguration the euro-area needed to make the euro a truly global currency.

The SEC turns up the heat on private equity expense allocations

2016 ◽  
Vol 17 (2) ◽  
pp. 35-38
Author(s):  
Samuel Lieberman ◽  
John T. Araneo
Keyword(s):  
Financial Services ◽  
Private Equity ◽  
Equity Fund ◽  
Content Type ◽  
Private Equity Fund ◽  
Fund Managers ◽  
Compliance Programs ◽  
Raising Awareness ◽  
The Us ◽  
Practical Implications

Purpose To discuss the US Securities and Exchange Commission’s (“SEC’s”) increasing focus on disclosure and conflict-of-interest problems arising from how private equity fund (“PE Fund”) managers allocate expenses between management and fund investors. Design/methodology/approach This article summarizes the background of this focus on expense allocations and, drawing from the recent SEC enforcement actions focused on this issue, and identifies the types of both expenses and disclosures that have caught SEC attention. Findings After spending the first two or three years post Dodd-Frank raising awareness of these issues, the SEC has begun to impose large fines over expense-allocation conflicts and disclosure issues. Practical implications It is imperative for PE Fund managers to retain counsel to review their fund offering documents, expense allocation practices, and compliance programs to ensure consistency with the SEC’s recent decisions on these issues. Originality/value Practical guidance from experienced financial services lawyers.

Unstable politics may make trade deals uncertain

2019 ◽  
Keyword(s):  
Financial Services ◽  
Trade Agreement ◽  
National Elections ◽  
Content Type ◽  
The Us ◽  
Ideological Divergence ◽  
The Uk ◽  
Trade Deals ◽  
Trade Partners ◽  
The Eu

Subject Politics and trade talks. Significance Understanding the factors that determine how long trade negotiations take will help businesses navigate the uncertainty, as the UK government prepares to negotiate trade agreements once it leaves the EU. The Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU took seven years to finalise. Less comprehensive renegotiations of international agreements can be shorter, including the US-Mexico-Canada agreement, which took less than two years. Impacts UK sectors highly exposed to the EU or United States, including automotive and financial services, face prolonged investment uncertainty. Timing of national elections, lobbying and the ideological divergence between trade partners will determine post-Brexit trade deal talks. Continued polarisation of major economies' electorates will delay or stop other global deals, including on foreign aid and climate change.

Depository banks under the Alternative Investment Fund Managers Directive (AIFMD)

2014 ◽  
Vol 15 (4) ◽  
pp. 29-36 ◽  
Author(s):  
Lukas Prorokowski
Keyword(s):  
Secondary Analysis ◽  
Capital Requirements ◽  
Third Party ◽  
Investment Fund ◽  
Counterparty Risk ◽  
Content Type ◽  
Fund Managers ◽  
Insightful Analysis ◽  
Practical Implications ◽  
Alternative Investment

Purpose – This paper aims to investigate whether enhanced requirements result in the depositories exiting the business. Furthermore, this paper attempts to analyse prospective changes to the operating structures caused by the Alternative Investment Fund Managers Directive (AIFMD). Most importantly, this paper discusses the processes to evaluate and manage counterparty risk relating to prime brokers. AIFMD makes fundamental changes to the depository liability and managing counterparty risk by making a depository bank liable for any losses to investor assets, even those held within third-party custodians appointed by the depository. Depositories will also need to calculate the probability of default of their sub-custodians and use complex credit models to calculate any capital requirements under the fourth Capital Requirements Directive (CRD IV). Design/methodology/approach – This paper is based on an insightful secondary analysis of the AIFMD with practical implications drawn for depository banks. The analysis of this topical research has been broken down into the following sections: assessing and managing counterparty risk of prime brokers; insurance against defaults of prime brokers; and regulatory-driven challenges and changes to depository banks. Findings – The post-Lehman banking industry has realised that counterparty risk cannot be ignored. This has triggered heated debates among regulators and practitioners whereby any depository bank should clearly separate the assets of its clients from the depository assets and its own assets. This paper argues that the custodian services will witness consolidation with the big players remaining and small custodians forced to leave the business in light of the enhanced liabilities under the AIFMD. In addition to this, this paper has stressed that assessing counterparty risk should be supported by an insightful analysis of the culture of a prime broker; its legal, structural and regulatory safeguards; and quality of assets. Moreover, managing risks associated with prime brokers entails significant costs to depositories. Thus, depository banks are advised to factor these costs into their pricing models. Originality/value – Given the magnitude of recent regulatory initiatives and complex challenges faced by depositories, an important question arises whether depository banks would exit the business in light of the regulatory-induced liabilities. This paper addresses the aforementioned question and provides practical implications into managing emerging risks by depository banks. At this point, the majority of depositories are in a process of developing in-house solutions for managing risks related to prime brokers, and hence would benefit from practical insights into these processes that are provided in this paper.

Outlook for a future EU-US trade agreement is poor

2019 ◽  
Keyword(s):  
Trade Policy ◽  
Trade Agreement ◽  
Member States ◽  
Content Type ◽  
Us Economy ◽  
The Us ◽  
Near Future ◽  
The Eu

Subject EU-US trade. Significance US President Donald Trump’s ‘America First’ trade policy threatens the highly interconnected transatlantic economy. This presents a serious challenge to the EU and certain member states more than others, and resolving this tension is unlikely in the near future. Impacts Some US protectionist trade tendencies are likely to continue post-Trump. Trump's accusations that the euro is unfairly undervalued raises the (faint) prospect of an even more profound transatlantic dispute. The importance of the US economy to European firms enables Washington to enforce secondary sanctions.

Marketing funds in Europe: a practical look at the marketing regime under the Alternative Investment Fund Managers Directive 2011/61/EU and other regulatory requirements

2014 ◽  
Vol 15 (3) ◽  
pp. 20-27
Author(s):  
Jacob Ghanty ◽  
Justin Cornelius ◽  
Matthew Baker ◽  
Chris Ormond
Keyword(s):  
Financial Regulation ◽  
Investment Fund ◽  
Regulatory Requirements ◽  
Investment Funds ◽  
Content Type ◽  
Fund Managers ◽  
Wide Range ◽  
Questions And Answers ◽  
Financial Regulatory ◽  
Alternative Investment

Purpose – To provide a practical look at the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD) and other regulatory requirements as they pertain to marketing funds in Europe. Design/methodology/approach – A series of questions and answers exploring some of the principal issues to be aware of when raising a fund in Europe. AIFMD is the key focus, but we also examine other financial regulation that may apply alongside AIFMD, as well as cross-border implications of any marketing initiative. Findings – One of the original aims of AIFMD was to harmonise the management and marketing of alternative investment funds in Europe so that a uniform set of rules will eventually apply. However, in the meantime, the law and regulations relating to marketing are particularly complicated, with a wide range of different requirements that may apply depending on who you are and where you are marketing. Originality/value – Practical guidance from experienced investment management and financial regulatory lawyers.

Considerations for Asian fund managers under the US New partnership audit regime

2018 ◽  
Vol 19 (3) ◽  
pp. 39-41
Author(s):  
Anne-Marie Godfrey ◽  
Stuart Leblang ◽  
Ron Grabov-Nardini ◽  
Monte Jackel
Keyword(s):  
Economic Burden ◽  
Design Methodology ◽  
Internal Revenue Service ◽  
Investment Fund ◽  
Fund Manager ◽  
Content Type ◽  
Fund Managers ◽  
The Us ◽  
Practical Guidance ◽  
Practical Implications

Purpose This paper aims to explain how the Bipartisan Budget Act of 2015, as modified by the Protecting Americans from Tax Hikes Act of 2015, changes the way the US Internal Revenue Service will conduct audits of collective investment vehicles treated as partnerships for US tax purposes. Design/methodology/approach This study explains the entities covered by the new partnership audit regime, the effective dates of the new regime and steps to be taken by funds covered by the new audit regime. Findings The results show that the new regime creates a liability at the partnership level for any unpaid tax, placing the tax burden on current-year partners. Practical implications A fund manager should determine whether the new audit regime is applicable to any of the funds he or she is managing and, if so, amend the fund documents to accommodate the new audit rules, providing a mechanism to elect and supervise a partnership representative, a mechanism to allocate the economic burden of the tax to the appropriate partners and a procedure for selecting the method to calculate the amount of the fund’s tax liability attributable to an audit. Originality/value This study provides practical guidance from experienced investment, fund and tax lawyers.

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