Key Takeaways
- • The Alternative Investment Fund Managers Directive (AIFMD) applies to all EU and non-EU AIFMs managing alternative investment funds within the EU, regardless of fund domicile or marketing location, establishing a broad regulatory perimeter across the alternative asset management industry.
- • AIFMD scope encompasses three primary categories of managers: EU AIFMs managing either EU or non-EU AIFs; non-EU AIFMs managing EU AIFs; and non-EU AIFMs marketing AIFs within the EU, creating extraterritorial compliance obligations for global managers.
- • An AIFM is defined functionally as any legal entity whose regular business involves managing one or more AIFs through investment management services (portfolio management or risk management), with optional ancillary activities including administration, marketing, and asset-related services.
- • As of July 2016, the UK remained fully subject to AIFMD requirements following the June 23 referendum vote to leave the European Union, with the regulatory regime remaining in effect during negotiation periods pending formal separation proceedings.
- • The 2016 update supplements Jones Day's January 2014 white paper and reflects recent implementation developments, providing AIFMs with action points for compliance with current and upcoming AIFMD requirements.
Summary
The Alternative Investment Fund Managers Directive (AIFMD) represents a comprehensive regulatory framework governing alternative asset managers across the European Union. Established by Directive 2011/61/EU, the regime imposes authorization and operational requirements on fund managers managing alternative investment funds, reflecting post-2008 financial crisis regulatory priorities around capital raising, risk monitoring, reporting, transparency, and remuneration controls.
The directive's application is broad and extraterritorial in scope. It applies to EU-based AIFMs managing any alternative investment fund (whether EU-domiciled or offshore), non-EU managers operating EU-domiciled funds regardless of marketing status, and any non-EU manager marketing alternative funds within EU jurisdictions. Critically, AIFMD requirements attach to the manager rather than the fund itself, meaning compliance obligations follow the entity conducting fund management activities. The regulatory definition of an AIFM encompasses any legal person whose regular business involves managing one or more AIFs through core investment management services such as portfolio management or risk management. Managers may also undertake ancillary activities including fund administration, investor marketing, and asset-related services.
The 2016 update issued by Jones Day addresses regulatory developments since the directive's initial implementation and the firm's previous 2014 analysis. A significant consideration introduced in this update concerns the United Kingdom's June 23, 2016 referendum vote to leave the European Union. At the time of this white paper's publication, the UK remained fully subject to AIFMD requirements, with the regulatory regime continuing in full effect throughout negotiation periods. Jones Day noted that formal separation would necessitate comprehensive review of UK financial legislation, including AIFMD implementation, and committed to updating guidance as Brexit separation proceedings clarified the UK's future regulatory relationship with EU frameworks.
The white paper provides AIFMs with structured action points identifying specific compliance steps required under current and anticipated regulatory developments, offering institutional-grade guidance for managers navigating an increasingly complex alternative asset management regulatory environment across multiple jurisdictions.
The directive's application is broad and extraterritorial in scope. It applies to EU-based AIFMs managing any alternative investment fund (whether EU-domiciled or offshore), non-EU managers operating EU-domiciled funds regardless of marketing status, and any non-EU manager marketing alternative funds within EU jurisdictions. Critically, AIFMD requirements attach to the manager rather than the fund itself, meaning compliance obligations follow the entity conducting fund management activities. The regulatory definition of an AIFM encompasses any legal person whose regular business involves managing one or more AIFs through core investment management services such as portfolio management or risk management. Managers may also undertake ancillary activities including fund administration, investor marketing, and asset-related services.
The 2016 update issued by Jones Day addresses regulatory developments since the directive's initial implementation and the firm's previous 2014 analysis. A significant consideration introduced in this update concerns the United Kingdom's June 23, 2016 referendum vote to leave the European Union. At the time of this white paper's publication, the UK remained fully subject to AIFMD requirements, with the regulatory regime continuing in full effect throughout negotiation periods. Jones Day noted that formal separation would necessitate comprehensive review of UK financial legislation, including AIFMD implementation, and committed to updating guidance as Brexit separation proceedings clarified the UK's future regulatory relationship with EU frameworks.
The white paper provides AIFMs with structured action points identifying specific compliance steps required under current and anticipated regulatory developments, offering institutional-grade guidance for managers navigating an increasingly complex alternative asset management regulatory environment across multiple jurisdictions.
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