ESMA publishes final reporting guidelines for AIFM Directive

EUROPE – The European Securities and Markets Authority (ESMA) has published final reporting guidelines for the Alternative Investment Fund Managers' Directive (AIFMD), along with a new proposal for another level of mandatory reporting.

ESMA said it had published an opinion proposing the introduction of additional periodic reporting for alternative investment funds (AIFs), to include information such as the Value-at-Risk of the funds, or the number of transactions carried out using high-frequency algorithmic trading techniques.

The authority published final guidelines on the reporting obligations under the AIFMD, which require managers of AIFs to report certain information to their national supervisors.

The directive covers hedge funds, private equity and real estate funds and came into force in July.
According to the final guidelines, managers will have to report on the portfolio concentration of alternative investment funds.

Key elements of this include reporting the breakdown of funds' investment strategies, the main markets and instruments in which they trade, the total value of assets under management and turnover of each fund, as well as the principal exposures and the most important portfolio concentration of the funds.

The key elements of the additional level of reporting the authority is now proposing include the funds' risk measures, their liquidity profile and their leverage.

ESMA said the guidelines clarified AIFMD provisions on required information, which would help achieve a more comprehensive and consistent oversight of the activities of alternative investment fund managers.

The authority also said it was publishing technical supporting material that would make managers' reporting easier, such as a consolidated reporting template, detailed IT guidance for filing of the XML and the XSD schema.

The guidelines will now be translated into the official EU languages.

When these translations are officially published, national regulators will have two months to confirm whether they comply or intend to comply by incorporating the guidelines into their supervisory practices, the EU authority said.