The AIFMD is one of the pillars of EU regulation for investment funds, which will be crucial to the development of the Capital Markets Union (CMU) and the post Covid-19 economic recovery in the European Union.
The Commission’s Report to Council and Parliament assessing the application and the scope of Directive 2011/61/EU on alternative investment fund managers provides a balanced analysis leading to the conclusion that, overall, the AIFMD regime is working well. Against this solid analysis, also underpinned by the conclusions of the report mandated to KPMG, EFAMA calls on the European Commission to follow a set of three overarching principles when reviewing the AIFMD framework to ensure that the framework is adequately revised without undermining the foundations on which the framework stands:
- Don’t fix something that is not broken: The ongoing review of AIFMD should be targeted only at addressing material shortcomings which are clearly demonstrated and that cannot otherwise be addressed through supervisory convergence or Level 2 harmonisation;
- Keep the AIFMD a “manager” regulation: The AIFMD was designed as a “manager” regulation, and not as a “product” regulation, because the alternative investment fund management sector is too diverse to include in a regulation product-specific rules for each category of AIFs. It follows that NCAs need to have the required flexibility to appropriately supervise that diverse universe;
- Focus on supervisory & enforcement convergence: Effective supervision and enforcement across Member States is as important as ensuring consistency across national rules. We would encourage the European Commission to ensure that ESMA makes full use of the existing powers at its disposal (including enforcement powers at Level 4) to promote greater supervisory and enforcement convergence.
EFAMA therefore advocates for the European Commission to focus on a limited number of areas where targeted amendments to the AIFM Regulation could be introduced and calls on ESMA to make full use of its current powers to ensure supervisory convergence and effective enforcement throughout the European Union.