AIFMD goes live

Author: Edward Morgan

After years of discussion, consultation and deliberation the controversial EU Alternative Investment Fund Managers Directive (the Directive) finally comes into force in the UK today. The Directive’s scope is very wide and will affect the way in which many UK (and other EU and non-EU) managers of alternative investment funds conduct their business, including those who do not necessarily consider themselves to be managers of funds at all.

The Directive regulates managers (known as AIFMs) of alternative investment funds (known as AIFs) rather than AIFs themselves and, with limited exceptions, requires UK AIFMs to seek authorisation from the Financial Conduct Authority as well as imposing certain requirements on them relating to the maintenance of capital, insurance, reporting, internal governance and remuneration as well as the appointment of depositories.

To the extent firms have not done so already, each structure in which they are involved should be analysed to determine whether the structure constitutes an AIF and whether the firm could be deemed to be the AIFM under the Directive. If the answer is yes, the next consideration is whether one of the limited exemptions applies: these include joint venture arrangements, family offices, holding companies and, subject to certain conditions being met, AIFs that are in run-off or have limited lives. If there is no applicable exemption but the firm’s assets under management are below a prescribed threshold a partial exemption from the Directive’s requirements may apply. Although those caught by the Directive who are managing and/or marketing AIFs on 21 July 2013 have until 22 July 2014 to comply with it under the transitional provisions, now is the time for firms to consider if and how the Directive may affect them.

If you have any questions about the impact of the Directive on your business or would like to discuss any other funds related issue, please do not hesitate to contact a member of our Funds Team.

Edward Morgan, Senior Associate, Fladgate LLP (

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