AIFMD: FCA on the use of proportionality in applying Article 15(1) on risk management

The FCA has updated its webpage on the AIFMD to clarify how alternative investment fund managers (AIFMs) can comply in a proportionate way with the AIFMD’s Article 15 requirement for hierarchical and functional segregation of a firm’s risk management function. In assessing this segregation, the FCA will review compliance with this requirement in accordance with the principle of proportionality set out in Article 15(1) of the AIFMD and Article 42(3) of the AIFMD delegated Regulation.

If an AIFM firm wants to comply with Article 15(1) other than through functional and hierarchical separation, and on the basis of proportionality, then the FCA advises that it should describe briefly in the notes to its AIFM application form (which AIFM application form the FCA expects to be submitted by no later than 22 January 2014) the specific safeguards that achieve the desired objective and if necessary, the FCA will follow up with a request for more information or assurances…

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