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European Opportunities In Gibraltar The Proposed Alternative Investment Fund Managers Directive

March 2010 - Corporate & Commercial. Legal Developments by Hassans.

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The European Commission (“EC”) drafted a proposal for the Alternative Investment Fund Managers Directive (“AIFMD” and/or the “Directive”) in response to the current global financial downturn.

The proposed Directive suggests that Alternative Investment Fund Managers (“AIFMs”) are in need of closer, more effective regulation and supervision due to the significant impact their activities can have on global financial markets. Alternative Investment Fund (“AIFs”) are defined in the Directive as all funds not regulated by the UCITS directive. These include hedge funds, funds of funds, private equity funds, commodity funds, real estate funds and infrastructure funds. AIFMs deploy a range of investment strategies and trading techniques and invest in a variety of financial products. It is estimated that at the end of 2008, AIFMs managed assets of approximately € 2 trillion throughout Europe. One of the ideas behind the European Opportunities In Gibraltar The Proposed Alternative Investment Fund Managers Directive AIFMD is that it will create a European brand, similar to UCITS in respect of retail funds, promoting heightened investor protection, transparency and regulation for the AIFMs which manage AIFs. As only one of four or possibly five jurisdictions in the EU which provides a fiscally effective legislative framework for the establishment of AIFs, Gibraltar will be well placed to take full advantage of this new EU brand.

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