The European Securities and Markets Authority (Esma) has published the final guidelines on the reporting obligations for alternative investment fund managers.
These guidelines state that managers must report investment strategies, exposure and portfolio concentration to national supervisors under the Alternative Investment Fund Managers Directive (AIFMD).
This includes the breakdown of investment strategies, the main markets and instruments the alternative investment fund trades, the total assets under management, portfolio turnover and the main exposures and portfolio concentration.
In addition, the European regulator has published an opinion piece that proposes introducing periodic reporting measures for value-at-risk of alternative investment funds or the number of transactions carried out using high frequency algorithmic trading techniques.
The key elements of the additional information proposed by Esma include risk measures, liquidity profiles and leverage.
Steven Maijoor, Esma chair, says one of the key objectives of the directive is bringing the alternative fund industry under supervision, thus providing more transparency to investors and regulators.
“As the AIFMD came into force in July, both AIFMs and national supervisors now need to prepare for their regulatory filings as it is these reports which will enable supervisors to monitor the systemic risks of alternative investment funds,” Maijoor says.
“In order to achieve this objective, national supervisors should receive all the necessary information in order to ensure an appropriate overview of the sector.”
The guidelines released by Esma will be translated into the official languages of the European Union. National authorities will then have two months from the date of publication of the translations on Esma’s website to confirm whether they comply or intend to comply with the guidelines.
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