The European Securities and Markets Association (Esma) update on the functioning of the Alternative Investment Fund Managers Directive (AIFMD) passport regime and its potential for extension to third party AIFMs has been deemed inconclusive.
However, Tim Thornton, chief data officer at MUFG Fund Services, says that that there were some positives for non-EU managers to take from the guidance.
“Esma has recognised that difficulties caused by divergent approaches and interpretations between jurisdictions indicate that the extension of passporting would be helpful. This is encouraging as the divergence in approach remains a big issue for non-EU managers and funds,” says Thornton.
But non-EU managers and funds require jurisdiction-by-jurisdiction compliance, which can be a cumbersome and expensive process according to Thornton, with many still waiting for a solution.
The fact that only six jurisdictions were assessed has disappointed many and although Esma has stated that it will continue to assess further jurisdictions over the coming months there is frustration that this has not already taken place. Many non-EU managers think this will be a slow, laborious process.
Furthermore, despite receiving Esma’s approval, Guernsey, Jersey and Switzerland still need the decision ratified by the European Commission, Parliament and Council, adding yet more time to what is already a long drawn out process.
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