AIFMDRegime

AIFMDRegime refers to the European Union framework established by the Alternative Investment Fund Managers Directive (AIFMD), which governs the operation and supervision of managers of alternative investment funds (AIFs). The regime aims to enhance investor protection, transparency, and the stability of private markets by setting harmonized rules for managers and funds that are not invested in traditional UCITS funds. Implemented in 2013 with Level 2 measures, the regime also supports cross-border marketing and management within the EU.

Scope and participants: The regime applies to EU-based managers that manage or market AIFs in the EU. It also covers non-EU managers marketing to EU investors under passporting mechanisms or national private placement regimes. An AIF includes funds such as private equity, real estate, hedge funds, and other non-UCITS vehicles.

Core obligations: An AIFM must be authorized by its home member state’s competent authority and maintain appropriate own funds. It is required to establish a robust governance framework, a risk management function, and policies for valuation, liquidity management, and conflicts of interest. Remuneration policies are subject to supervisory oversight. For EU AIFs, the regime requires the appointment of a depositary to safekeep assets and monitor cash flows. AIFMs must provide ongoing investor disclosures and periodic supervisory reporting.

Cross-border access: Authorized AIFMs may passport their management and marketing across the EU to professional investors. Non-EU managers can access EU markets through private placement arrangements or obtain authorization where applicable.

Supervision and evolution: ESMA coordinates EU-wide supervisory convergence, with national competent authorities enforcing the rules and imposing sanctions for non-compliance. The regime is supported by delegated and implementing acts and ongoing ESMA guidance to address market developments.