Alternative Investment Funds Managers Directive: ESMA Publishes Level 2 Advice

Alternative Investment Funds Managers Directive: ESMA publishes Level 2 Advice

On 16 November 2011, the European Securities and Markets Authority ("ESMA") issued its final technical advice on the Alternative Investment Fund Managers Directive ("AIFMD") implementing measures¹. For the most part, the final report does not contain substantial changes to the draft advice but some of the changes introduced on the basis of the feedback received are noted below. Some of these changes represent welcome developments but many aspects of the advice continue to raise concerns.

Additional Own Funds and Professional Indemnity Insurance

The AIFMD follows the method of calculating the own funds requirement under the UCITS IV Directive by providing for a minimum level of capital plus an additional amount where assets under management exceed a set threshold. However, the AIFMD goes further by requiring that AIFM have additional own funds or professional indemnity insurance to