07 June 2013

AIFMD - Guidelines on AIFMD reporting obligations

David Guin
Partner | US

The European Securities and Markets Authority (‘ESMA’) has published a consultation paper on guidelines relating to reporting obligations under the Alternative Investment Fund Managers Directive (‘AIFMD’).

The reporting requirements will be relevant to all managers marketing alternative investment funds (‘AIFs’) into the EU, including non-EU managers such as US managers marketing either EU or non EU AIFs to EU investors.

ESMA is proposing to streamline the reporting processes under Article 3 (sub-threshold alternative investment fund managers (‘AIFM’)) and Article 24 (full-scope AIFM reporting obligations to competent authorities (i.e., national regulators) of the AIFMD to provide clarity to AIFMs on the information they will have to report to national regulators of their home Member State. ESMA is of the view that there is a need to supplement the Regulation with further guidelines on reporting obligations, in addition to Annex IV of the AIFMD Regulation which already includes a comprehensive reporting template that AIFMs will have to use to comply with their reporting obligations.

In addition, the further standardisation of information sent to national regulators by an AIFM will facilitate the exchange of information between the Member State regulators.

The draft guidelines set out at Annex III of the consultation paper what information should be reported to national regulators and how to do so, as well as introducing procedures to be followed when AIFMs become subject to different reporting obligations (depending on a test set out in Article 110(3) of the Implementing Regulation).

ESMA is consulting on a number of proposals including:

  • reporting to regulators based on the calendar year (as opposed to fiscal year);
  • separate reporting in relation to individual AIFs in master-feeder or umbrella structures (as opposed to aggregated reporting);
  • using a single base currency in reporting even for AIFs with different share classes denominated in different currencies;
  • in identifying the main instruments in which an AIF trades, AIFMs should indicate the five most important individual positions and whether each position is a long or a short position (and, in the case of a short position, whether it takes the form of an uncovered short position);
  • reporting high frequency trading in terms of the percentage of an AIF’s net asset value;
  • in order to report the ten principal exposures and the five most important portfolio concentrations of an AIF, AIFMs should aggregate the instruments in which they invest according to the typology of instruments;
  • Calculating geographical focus of an AIF with reference to total value of the AIF’s assets;
  • the inclusion of the number of transactions (and not just their value) when reporting turnover; and
  • further guidance and additional measures for reporting the risk profile of an AIF.

The consultation closes on 1 July 2013, after which time ESMA will finalise the guidelines.

If you would like any further information on how the reporting obligations under the AIFMD will affect your firm, please get in touch with your usual contact.

Category: Article