Sarah Jane Leake | Bloomberg LawESMA's draft technical advice to the European Commission on possible implementing measures of the Alternative Investment Fund Managers Directive in relation to supervision and third countries - European Securities and Markets Authority Consultation Paper ESMA/2011/270 of 23 August 2011 The Alternative Investment Fund Managers Directive (AIFM Directive),1 which came into force on 21 July 2011, will allow EU alternative investment fund managers (AIFMs) to market EU-domiciled alternative investment funds (AIFs) on a cross-border basis within the EU. The Directive must be transposed into the national law of all Member States by 22 July 2013.2 The regime will be reviewed in 2015 by the European Securities and Markets Authority (ESMA).3 At this point, ESMA will make recommendations as to whether the regime should be extended to the promotion of non-EU AIFs and to marketing by non-EU AIFMs. It is anticipated that any extension to the passporting regime would take effect in 2015. Meanwhile, non-EU AIFMs may market EU AIFs and non-EU AIFs by virtue of national private placement regimes (PPRs). PPRs may also be used by EU AIFMs wishing to market non-EU AIFs within the EU. Should the passporting regime be extended to non-EU entities, PPRs will probably be extinguished in 2018. Under the Directive, the European Commission has been delegated the power to adopt subordinate measures to the legislation. In December last year, the Commission issued a request for advice to CESR4 on their content, with a focus on, amongst other issues, the treatment of third country entities. Last December, CESR launched a debate on various policy options identified in relation to certain parts of the Commission's request.5 In view of feedback received, ESMA, this July, published a consultation paper6 covering the bulk of issues raised in the Commission's request: authorisation and operating conditions,7 the role of the depositary,8 and leverage and transparency.9 The implementing measures on third countries were, however, considered less urgent. This is because they relate to the introduction of a passporting regime for non-EU entities, which will not be operational until at least 2015. ESMA's proposals on this subject were finally published on 23 August 2011,10 with a view to submitting its advice to the Commission ahead of the 16 November 2011 deadline.
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