Categories:Europe,Funds

Unintended consequences: application of the AIFMD to SPVs

A perennial gripe of many Anglo-Saxon lawyers about European legislation is that it is often opaque and poorly drafted and has unintended consequences. The Alternative Investment Fund Managers Directive (AIFMD), which comes into effect on 22 July 2013, is a particular offender in this regard. While investment managers are generally clear that they are foursquare within the sights of the new regime, banks appear to be less attuned to its application — particularly to SPVs.

The AIFMD primarily captures EU managers of alternative investment funds (AIFs). The consequences of being a manager of an AIF are onerous: managers are subject to detailed requirements as to, inter alia, authorisation, capital, organisation, systems and controls, risk management, delegation, valuation, reporting, appointment of a depositary and marketing. (AIF status also results in financial counterparty status under EMIR and has negative capital consequences for EU firms that are counterparties to derivatives with the SPV, as the exemption from the CVA, capital charge under CRD IV, does not apply to AIFs.) Where an AIF is self-managed (i.e. has no external manager), the AIF itself will be subject to the requirements. The marketing of AIFs in member states will also be subject to a notification requirement and also potentially restricted under national private placement regimes. This raises two key questions — is an SPV an AIF? And if so, can it comply with, or work around, the requirements? …

If you are registered and logged in to the site, click on the link below to read the rest of the Allen & Overy briefing. If not, please register or sign in with your details below.

Briefings from Allen & Overy

  • ITC reaffirms its power to bar digital file transfers

    The ITC has reaffirmed its power to ban electronic transmissions from the US where those transmissions infringe an intellectual property right or are otherwise based on an unfair trade practice.

  • Changes to French takeover rules

    A new French law, the ‘Law to recapture the real economy’ (‘Loi visant à reconquérir l’économie réelle’ or ‘Loi Florange’), was made on 1 April 2014.

View more briefings from Allen & Overy

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

One Bishops Square
London
E1 6AD
UK
http://www.allenovery.com

Turnover (£m): 1,189.00
No. of Lawyers: 2,304
No. of Lawyers (Asia Pacific): 357
Offices (Asia Pacific): 10

Jobs