AIFMDstä

The Alternative Investment Fund Managers Directive (AIFMD) is a regulatory framework established by the European Union to enhance transparency, supervision, and investor protection within the alternative investment fund (AIF) sector. Adopted in 2011 and fully implemented in 2013, the directive applies to managers of alternative investment funds, including hedge funds, private equity funds, real estate funds, and other non-traditional investment vehicles. Its primary goal is to standardize regulatory practices across EU member states, reducing fragmentation and improving market stability.

Under the AIFMD, fund managers must register with their home country’s competent authority and comply with strict disclosure requirements, such as providing detailed information about fund strategies, risks, and performance. The directive also introduces passporting rights, allowing managers to market their funds across the EU without needing separate national approvals, provided they meet regulatory standards. However, managers must still adhere to local rules in host countries where funds are marketed.

Key provisions include capital requirements, valuation rules, and restrictions on leverage to mitigate systemic risks. The directive also mandates the appointment of depositaries to safeguard fund assets and introduces reporting obligations for large exposures and conflicts of interest. National regulators play a crucial role in monitoring compliance, while the European Securities and Markets Authority (ESMA) oversees coordination and enforcement.

The AIFMD has been amended over time, most notably through the AIFMD II Directive in 2019, which expanded its scope to include certain non-EU managers and introduced stricter rules on sustainability disclosures. While the directive has strengthened investor confidence and market integrity, some critics argue it imposes additional burdens on smaller managers. Overall, the AIFMD remains a cornerstone of EU financial regulation, balancing innovation with risk management in the alternative investment sector.