AIFMD News Update: Distinguishing Between Open And Closed-Ended Funds

When the AIFMD was adopted, no harmonised definition of "closed-ended" Alternative Investment Funds ("AIFs") was provided within the Directive's text. To this end, on 17th December 2013, following submission of draft standards by ESMA, the European Commission adopted the regulatory technical standards ("RTSs") intended to determine whether an AIFM is an AIFM of open-ended AIF(s) and/or closed-ended AIF(s). The said RTSs were published in the Official Journal of the European Union on the 24 June 2014.

The RTS provide that an AIFM of a closed-ended AIF is an AIFM which manages an AIF other than an open-ended AIF. An open-ended AIF is, in turn, defined as an AIF which repurchases or redeems its shares or units with its investors, at the request of any of its shareholders or unit holders, prior to the commencement of its liquidation phase or wind-down out of the assets of the AIF and does so according to the procedures and frequency set out in its rules or instruments of