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.

scholarly journals Implementation of Directive 2011/61/Eu of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers Into Czech Legal System

2021 ◽  
Vol 21 (1) ◽  
pp. 47-61
Author(s):  
Zuzana Šiková
Keyword(s):  
Czech Republic ◽  
Legal System ◽  
European Parliament ◽  
Investment Fund ◽  
Investment Funds ◽  
Scientific Methods ◽  
Fund Managers ◽  
Investment Companies ◽  
Alternative Investment

This contribution deals with the implementation of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 into Czech legal system. The main aim of the contribution is to confirm or disprove the hypothesis that entity in Section 15 of Act no. 240/2013 Coll, on Investment Companies and Investment Funds, as amended, is an alternative fund according to the Directive 2011/61/EU and that Directive 2011/61/EU was not transposed in Czech Republic properly. Author used to confirm or disprove above mentioned hypothesis scientific methods, especially comparison, induction and deduction. This contribution also looks at the Directive 2011/61/EU evaluation of its effectiveness and possible development of regulation in this area.

13 Listings of Private Investment Funds as a Means of Mitigating the Governance Challenge

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Stock Exchange ◽  
Private Investment ◽  
Investment Fund ◽  
London Stock Exchange ◽  
Investment Funds ◽  
Fund Managers ◽  
Potential Market ◽  
Securities Exchanges ◽  
Regulatory Functions ◽  
Alternative Investment

This chapter explains how the admission to listing of private investment funds on a recognized exchange can provide a means to address the governance challenge. It first considers the regulatory functions of securities exchanges before turning to the Irish Stock Exchange (ISE), taking into account three areas relevant to the governance challenge faced by private investment funds: general obligations of disclosure, notification of interests and key developments, and communications with unitholders. It then examines how an ISE listing can provide a potential market-oriented solution to the governance challenge. It also discusses listing-related developments at the London Stock Exchange, Alternative Investment Fund Managers Directive depositories, and limitations on the effectiveness of exchange listings.

The increasing popularity of private funds

2020 ◽  
Vol 21 (1) ◽  
pp. 69-75
Author(s):  
Jerry Koh ◽  
Jonathan Lee
Keyword(s):  
Private Equity ◽  
Private Investment ◽  
Business Environment ◽  
Government Support ◽  
Capital Inflows ◽  
Regulatory Regime ◽  
Investment Funds ◽  
Content Type ◽  
Fund Managers ◽  
Wide Range

Purpose To introduce the various private fund structuring options available in Singapore, an important fund management hub that has increasingly also come to be recognized as a popular fund domicile with its pro-business environment, transparent and robust regulatory regime and government support through tailored investment structures, tax incentives and extensive double taxation treaties. Design/methodology/approach This article provides an overview of the available private fund structures as well as the key legal issues and considerations that fund managers and investors should take into account when structuring a private fund. It also provides a brief summary of the available tax incentive schemes for funds in Singapore. Findings With growth in private market assets under management fueled by private equity funds over the last decade, the use of private investment funds established in Singapore has become a popular means to tap the large capital inflows into Asia. Singapore offers a wide range of fund structures to suit different fund strategies and considerations, including the variable capital company (“VCC”) structure, a legal structure tailored for use as investment funds that was introduced in January 2020. Practical implications There are a range of Singapore private fund structures available with different features, including the VCC, which is a corporate structure that allows for umbrella-sub-fund structures with segregated assets and liabilities, and the limited partnership, which is familiar to international investors and permits a large degree of contractual flexibility. Other structures such as unit trusts and private companies may also be suitable depending on the particular circumstances and objectives of the fund. Fund managers who are exploring setting up fund vehicles to tap Asian capital or to invest in Asia should be aware of the possible options, and their pros and cons. Originality/value Practical analysis and guidance and market commentary from experienced investment funds lawyers.

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.

14 Evaluating and Implementing Private Monitoring Solutions

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Regulation ◽  
Private Investment ◽  
Investment Fund ◽  
Due Diligence ◽  
Investment Funds ◽  
Private Monitoring ◽  
Fund Managers ◽  
Investment Protection ◽  
Adoption And Implementation ◽  
Flow Of Information

This chapter considers three private monitoring solutions designed to help fund investors better address the problems arising from the governance challenge by facilitating a better flow of information from the fund manager to the investors and their agents. All three private monitoring solutions recognise the commercial contexts in which private investment funds operate by emphasizing voluntary steps that fund managers and investors can take incrementally. Each focuses on the provision of accurate and timely information as the means to overcome the investment protection concerns that arise due to the collectivised nature of the private investment fund. The chapter first looks at the criticisms against private monitoring solutions as well as the limits of financial regulation before discussing due diligence as the commercial foundation for private monitoring solutions. It also examines how to best support the wider adoption and implementation of private monitoring solutions.

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.

Hong Kong Securities and Futures Commission (SFC) highlights operating, control and compliance deficiencies in asset management industry

2018 ◽  
Vol 19 (1) ◽  
pp. 63-68 ◽  
Author(s):  
Anne-Marie Godfrey
Keyword(s):  
Hong Kong ◽  
Asset Management ◽  
Service Providers ◽  
Governance Structures ◽  
Investment Fund ◽  
Extensive Experience ◽  
Investment Funds ◽  
Content Type ◽  
Best Execution ◽  
Asset Managers

Purpose To examine the nine common areas of non-compliance in managing investment funds and discretionary accounts, detailed in a Hong Kong Securities and Futures Commission (SFC) circular dated September 15, 2017, directed at SFC-licensed asset managers. Design/methodology/approach Discusses a July 2017 circular indicating the SFC’s general concerns and analyzing the following nine common areas of non-compliance cited in the September 15, 2017 circular: (1) inappropriate receipt of cash rebates giving rise to apparent conflicts of interests, (2) failure to follow investment-suitability and discretionary account mandates during solicitation, (3) failure to implement liquidity-risk management processes, (4) deficiencies in governance structures and fair-valuation procedures, (5) deficiencies in systems for ensuring best execution, (6) failure to safeguard fair order allocation, (7) inadequate controls for protection of client assets, (8) inadequate systems to comply with investment restrictions, and (9) inadequate safeguards to address market misconduct risk. Findings The nine examples of non-compliance provide a useful insight into key “problem areas” indicated to currently be of particular concern to the SFC. Practical implications All SFC-licensed asset managers would be well advised to revisit their internal governance structures and operational policies and procedures in order to ensure that they are compliant with applicable standards and requirements. Originality/value Practical guidance from a lawyer with extensive experience advising investment managers and advisers, fund administrators, trustees and other fund service providers on investment fund-related issues.

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