AIFM Directive - New solutions to Old Problems

The Belgian Presidency of the EU Council has issued a further compromise draft of the AIFM Directive, dated 30 September 2010 (with some amendments published on 4 October 2010). Contrary to the previous draft (explained in our recent RegZone article), which did not contain provisions relating to the contentious areas in which a consensus has yet to be reached between the European institutions and between certain Member States, this latest proposal (the "Proposal") contains a complete set of Directive provisions. Importantly, it takes an entirely new approach to the issue of third countries (thus far the principal bone of contention in the legislative process) and also addresses the thorny issue of how AIFM managing private equity funds should be treated. As in the previous draft however, provisions on short selling have not been included on the basis that a separate European legislative process is currently underway to regulate this area.