The Directive on Alternative Investment Fund Managers was published in the Official Journal of the European Union on 1 July 2011, with a view to creating a comprehensive and effective regulatory and supervisory framework for alternative investment fund managers within the EU.
The scope of AIFMD is broad; it captures the management and the marketing of alternative investment funds or “AIFs” (i.e. most vehicles that would be regarded as "funds”, as well as vehicles that one might not think of as a "fund" at all).
Content of the Directive
Please click on the tiles below for more details on the various topics covered by AIFMD. Some topics will only be relevant to European fund managers who are authorised under AIFMD as implemented in the jurisdiction in which they carry out their business.
Other topics will be of wider relevance, including for managers based outside of Europe. For example, non-European fund managers who are marketing their fund products to European investors may find the marketing section useful. This section will then provide further details on which aspects of AIFMD these non-European fund managers would need to comply with.
Implementation in EU Member States
AIFMD, as is generally the case with EU Directives, is not directly applicable itself and requires each EU Member State to enact domestic legislation to implement it. It is therefore important when analysing the law in any given EU Member State to consider how the relevant Member State has implemented AIFMD and whether the relevant Member State has any guidance regarding how the law should be interpreted in that jurisdiction.
AIFMD is also supplemented, at the EU level, by directly applicable Level 2 Regulations (see EU, Luxembourg and UK Sources). The Level 2 Regulations apply in all Member States in addition to any domestic legislation without any further domestic implementation required.
Implementation in the UK
The UK implemented AIFMD into domestic law when it was part of the European Union. Post Brexit, the UK has retained many of the rules stemming from AIFMD. However, the UK is now considered a “third country” for the purposes of AIFMD. As such, among other impacts, UK AIFMs will no longer be able to market funds on the basis of the previous EU passport and instead will have to rely on National Private Placement Regimes when marketing any AIFs into the EU. For more details on the impact of Brexit on the rules applicable to UK and EU AIFs and AIFMs following 31 December 2020, please click on the Brexit tile below.
EEA relevance
AIFMD is marked “with EEA relevance”. This means that it was intended to be adopted under the agreement constituting the European Economic Area (“EEA”), and it was so adopted in 2016 (see here for more information). From the date of adoption, AIFMD has the same legal effect in non-EU countries within the EEA (i.e. Iceland, Liechtenstein and Norway) as in EU Member States. Nevertheless, for consistency with the AIFMD text, in this site we refer to “EU” and “non-EU” rather than “EEA” and “non-EEA”.
AIFMD 2.0: Level 1 complete; Level 2 loading...
Since the inception of AIFMD, the plan has always been to review the framework to ensure that it is fit for purpose. The first stage of this process is now complete, with the publication of a Directive to amend AIFMD in the Official Journal on 26 March 2024. Member States will have to implement the new rules into their national laws, and the deadline to do so is 16 April 2026.
The amending Directive is the “Level 1” framework legislation, and it empowers ESMA and the Commission to develop and adopt further detailed rules and guidance. These will be in the form of “Level 2” implementing measures and binding technical standards, and further recommendations and guidelines in “Level 3” measures. Therefore, although we now have the final framework of the new rules, more of the detail is still to be developed, both at an EU-level, and in Member States at a national level.
Overall, the changes being introduced by AIFMD 2.0 represent an evolution rather than a revolution in approach. Some changes, such as the increased flexibility for depositaries, are responsive to market demands (although a full passport remains out of reach for now), whereas other changes, such as the new loan origination framework and heightened liquidity management rules, are a reflection of market developments since AIFMD came into effect in 2013 and an increasing need for regulators to have greater oversight of these activities.
The devil is in the detail however, and in our publication we take a look at the final Level 1 positions and consider what is to come in Levels 2 and 3.
We have also prepared an unofficial consolidated text of AIFMD, showing the changes to be made in context, in blacklining.
Contact us
If you would like any further information on AIFMD, please contact any of the Linklaters’ contacts listed below, or your usual Linklaters contact.
