AIFMD Review

Article 69 of AIFMD requires the European Commission to review the application and scope of the Directive. Having commissioned KPMG to undertake an initial survey, the Commission submitted a brief report to the European Parliament and the EU Council in June, setting out its preliminary thoughts.

On 19^th August ESMA wrote to the Commission suggesting areas for review as part of this process. ESMA’s letter includes recommendations for changes in 19 areas including harmonising the AIFMD and UCITS regimes; delegation and substance; liquidity management tools; leverage; the AIFMD reporting regime and data use; and the harmonisation of supervision of cross-border entities.

The Commission is expected to publish a detailed consultation paper in the coming weeks which will give a more complete view of any changes proposed to AIFMD. Any planned legislation following this consultation is not likely to be published until mid-2021. This draft legislation will likely lead to negotiations between the Council of the EU and the European Parliament followed by an implementation period. Therefore, it is likely to be some time before we have clarity on the final nature of the changes and a number of years before any changes are effective.

Carne will provide a more detailed update following the publication of the Commission’s consultation and will continue to input into the AIFMD Review directly and through its membership of ALFI and Irish Funds.

Temporary Permissions Regime Update

The Financial Conduct Authority (FCA) has confirmed that the Temporary Permissions Regime (“TPR”) will take effect following the end of the transition period on 31^st December 2020. The window for registering under the TPR re-opens on 30^th September. Firms and fund managers that have not yet notified the FCA of their intention to register for the TPR can do so before the end of the transition period. Carne has previously registered under the TPR and our Fund Registrations team will be updating our submission to account for additional funds wishing to have continued access to the UK. Carne will liaise directly with clients as the TPR window re-opens.

Cayman Update

As a result of some considerable pressure in the past couple of years, the Cayman Islands newly enacted Private Funds Law (the “PFL”) came into full effect on August 8^th, 2020 impacting more than 11,000 closed ended funds.