More than two-fifths of asset managers in a survey will not have received authorisation of their alternative investment funds by local regulators in time for tomorrow’s
Alternative Investment Fund Managers Directive (AIFMD) deadline.
Meanwhile, nearly a fifth have not established their alternative investment fund structures in time for the July 22 implementation date, according to the survey of 58 firms in Europe, the US and Asia by BNY Mellon and FTI Consulting.
“It has been clear since we began our surveys last summer that the industry has consistently been playing catch up as firms have sought to hit tomorrow’s deadline,” says Hani Kablawi, head of asset servicing for Europe, Middle East & Africa at BNY Mellon.
The results tally with another survey, commissioned by law firm Hassans International and Deloitte Gibraltar, a consultancy, which found that only 64% of alternative fund managers were ready for the deadline and a sixth admitted they were not ready. The remainder said they planned to find workaround solutions such as phasing in compliance by 2018.
“What is overwhelmingly clear is that Europe is seen as an important opportunity for investment,” says James Lasry, head of funds at Hassans International. “However, some fund managers are also looking at ways around AIFMD and for solutions to the regulatory hurdles.”
The BNY Mellon-FTI Consulting survey asked respondents about specific aspects of the directive and found that 31% haven’t implemented risk and control systems, 36% haven’t updated fund documentation and 38% haven’t yet appointed a depositary.
The research also found that, based on their experiences with the AIFMD, asset managers now expect greater cost and complexity in complying with Ucits V regulation, which seeks to mesh the Ucits regime with aspects of the AIFMD and is expected to be transposed into law by European member states in 2016.
Respondents to the BNY Mellon-FTI Consulting survey were a mixture of small and large firms which operate or are considering operating a fund that would be subject to the AIFMD. They collectively manage $406 billion (€300 billion). The Hassans International-Deloitte Gibraltar survey was carried out by Citigate Dewe Rogerson and included 53 alternative fund managers.
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