The chaos around the Swiss Franc may be a sign of a coming crisis in the European Union. For private fund managers, a different crisis may be the new European regulatory regimes for private funds. With all of the flux in the United States over the regulation of private funds, it’s been easy to forget that the EU has been trying to put a new regulatory regime in place.
Over the summer, the official text of the Alternative Investment Fund Managers Directive (2011/61/EU)(.pdf 73 pages) was published. The European Parliament adopted the Directive in November, 2010 and the Council of the European Union adopted it in May, 2011. The EU member states will have until July 22, 2013 to update their the national laws, regulations and administrative provisions to give effect to the AIFMD.
This new EU legislation will regulate managers of hedge, private equity
and real estate funds and other alternative investment funds. It covers almost any investment fund except funds regulated under EU legislation on Undertakings for Collective Investment in Transferable
Securities (UCITS).
There are still many moving parts. The EU regulatory regime will need to be in place and there will likely be variations from country to country in the EU.
If you have European investors or operations in Europe, you have more reading to do.
Sources:
- Directive 2011/61 on Alternative Investment Fund Managers (.pdf)
- Now they tell us – EU admits AIFMD may not be suitable for venture capital by Matthew Evans in Reed Smith’s Private Funds Law Update
- Alternative Investment Fund Managers Directive: Text Published in the Official Journal of the European Union (.pdf)