EUROPE – The publication of the final text of the Alternative Investment Fund Managers Directive (AIFMD) has seen the investment management industry react with anger over the six-month timeframe European Union governments now face for its implementation.
Commenting after the European Commission accepted the implementing rules that will specify how national governments must transpose the directive, the UK's Investment Management Association (IMA) said it was the culmination of "a disappointing outcome which [arose] out of a flawed process".
Andrew Baker, chief executive of the Alternative Investment Management Association (AIMA), struck a more conciliatory tone, saying the publication of the nearly 150-page document would allow the global hedge fund industry to make "final preparations" for implementing the directive by July next year.
"While we may not agree with all of the final provisions – notably on areas like depositaries and delegation – it is now important to look forward," he said.
He nonetheless stressed that the organisation had sought to engage "intensively" with policymakers on the shape of the regulation since it first was considered three years ago.
Julie Patterson, the IMA's director of authorised funds and tax, added that some of the provisions had already been amended to address concerns raised by the industry.
"But some of the detailed provisions in this regulation are out of sync or even conflict with other regulations that managers are required to follow and will impose additional costs for investors without conferring clear benefits," she said, citing the detail surrounding delegation of custody.
"They may require the setting-up of additional companies within groups, reduce investor choice in non-EU markets, bring non-EU funds into quarterly reporting to EU regulators and could render 'multi-manager' type strategies impossible."
Patterson also warned that the Commission's decision to ignore advice from the European Securities and Markets Authority (ESMA) could result in the industry and regulators "drowning in data", as larger numbers of funds are required to comply with rigorous quarterly reporting regulations.
"This is a disappointing outcome that arises out of a flawed process," she concluded. "The IMA will now work to help our members implement the rules in such a way as to minimise disruption and incremental cost."
Contrary to warnings that countries would not have enough time to transpose the directive into national law, a number of EU legislatures have begun work on laws.
The Dutch lower house recently approved an exemption for pension fund managers – one that was opposed by the country's government and experts predicted was unlikely to pass into law, as it would create an uneven playing field between member states.
The German government recently amended its own draft, allowing for the continued existence of a number of otherwise threatened fund models.