AIFMD II: An Evolution Not A Revolution At Round 1

Summary

Today (25 November 2021) the European Commission (the Commission) released the results of its evaluation of the Alternative Investment Fund Managers Directive (AIFMD) which forms part of a  Capital Markets Union legislative package. Whilst it finds that AIFMD has “generally worked well and largely achieved its objectives of establishing an effective supervisory framework for AIFMs, ensuring high levels of investor protection and facilitating the creation of the EU AIF market,” it proposes several target areas for improvement. The problem themes identified are: difficulties in monitoring and managing financial stability risks (including regulatory fragmentation in the loan origination sector); inefficiencies in managing investment funds (eg lack of streamlined supervisory reporting and lack of depositary services in smaller markets); and inadequate protection of fund investors due to member states' differing interpretations of delegation rules.