Equity issues 03.02.14 preparing for AIFMD


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Equity issues 03.02.14 preparing for AIFMD

  1. 1. Welcome to EQUITY ISSUES, a short note on a relevant issue in the private equity and venture capital industry. If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers. Claire Cummings 020 7585 1406 claire.cummings@cummingslaw.com www.cummingslaw.com EQUITY ISSUES Preparing for AIFMD All managers of private equity and venture capital funds should have their planning for the end of the AIFMD transition period (22 July 2014) well underway. Below, we set out some of the issues which managers need to consider as part of their planning: o review current arrangements and establish the identities of the manager and each AIF (“fund”) and review any delegation arrangements; o complete and submit VoP FCA forms together with supporting documentation; o review and update the offering memorandum to take account of all changes consequent on the AIFMD requirements and to ensure that the offering memorandum contains full details of any changes in maximum leverage levels, risk profile and risk management systems employed;eview depositary arrangements and negotiate depository agreements to meet AIFMD requirements (including depositary rules);
  2. 2. o review current arrangements for the carrying out of risk management, internal audit and compliance functions and portfolio management and consider how such arrangements should be amended, if necessary, and put in place necessary documentation; o review all internal and reporting procedures and amend to comply with the AIFMD, for example, calculating and monitoring AUM and leverage, conflicts of interest; requirements relating to control over non-listed issues; notification of principal assets with sectoral and geographic breakdowns and principal exposures or concentrations; o review investment policy and strategy and consider requirements which may attach to investments and any relevant control threshold; o review all procedures for reporting to investors and regulators and amend to comply with the AIFMD; o review additional own funds and/or PI insurance requirements to ensure adequate funds and/or cover are in place; o review and update all marketing documentation; o review all potential passporting arrangements, considering the location of the manager and each fund and the relevant rules applying to each; and o review whether co-operation agreements need to be put in place between the UK and the country of each fund’s and/or the manager’s domicile. For more details, please contact me on claire.cummings@cummingslaw.com. Cummings February 2014 This document is for general guidance only. It does not contain definitive advice.
  3. 3. Cummings Tel: + 44 20 7585 1406 Mob: + 44 7734 057 327 www.cummingslaw.com 3 February 2014