The AIFMD regulation comes into force in the 27 countries of the European Union in July 2013. The main tenets of this wide ranging legislation are now well known throughout the industry.
Put simply, AIFMD will change the alternative investment industry forever.
This is the first in a 2 part "Global Perspectives" white paper examining what fund managers should be doing right now to ensure they are ready for AIFMD. We will publish Part 2 of this white paper next month (June 2013).
Email shane@globalperspective.co.uk to receive this free white paper.
Currently fund managers should be completing a detailed impact assessment to ensure they are ready for AIFMD.
Global Perspectives (www.globalperspective.co.uk) can assist in completing your AIFMD impact assessment and implementing its requirements.
Sign up for all free monthly Global Perspectives White Papers here:-
http://www.globalperspective.co.uk/aifmd#!whitepapers/c1a4e
or email:- shane@globalperspective.co.uk
"AIFMD & Private Equity Managers - An implementation checklist" - Global Pe...GECKO Governance
The new European AIFMD regulations will significantly impact the private equity (PE) industry. The regulations were primarily designed for hedge funds but are being applied wholesale to the private equity industry. Compliance will present a challenge for many PE managers.
In this white paper we will look at the main impacts of AIFMD on private equity managers and what they should be doing to comply
You can sign up for all our Global Perspectives white papers here:- http://lnkd.in/BthCg4
The document provides an overview of the structure and regulatory requirements of mutual funds in India. It discusses the key entities involved like sponsors, trustees, asset management company and their roles and responsibilities.
It outlines the regulatory prescriptions for trustees, including qualification criteria for trustee directors. It also summarizes the rights and obligations of trustees under the regulations, including oversight of the AMC, compliance with investment restrictions, and reporting requirements.
Finally, it mentions the regulatory provisions that must be fulfilled for approval of an AMC, including qualification criteria for AMC directors.
This document provides an overview of the remuneration rules for alternative investment fund managers (AIFMs) under the Alternative Investment Fund Managers Directive (AIFMD). It summarizes the key requirements for AIFM remuneration policies including identifying "identified staff", ensuring remuneration is appropriately risk-adjusted, requiring a portion of variable pay be deferred, and disclosure of remuneration practices. The document also discusses proportionality principles, where requirements can be tailored based on the size, nature and complexity of the AIFM. Overall, the guidelines aim to ensure remuneration structures do not encourage excessive risk taking and are consistent with other financial sector regulations.
Hedge Funds & AIFMD - what you should be doing to comply - Part 2 GECKO Governance
This is the second of our two part white paper covering AIFMD and what fund managers should be doing to comply. It is available here - http://lnkd.in/A4VeHz
The first part of this white paper (available here http://lnkd.in/ti3S37) examined many of the main areas fund managers should be reviewing to comply with AIFMD. This included identifying the AIFM, leverage calculations, fund manager authorization, depository selection, remuneration policies, and the requirements for non-European managers.
The second part of this white paper will look at the other important areas of the directive and what is required. These include fund domiciliation, manager liability, reporting requirements, managing illiquid investments and opportunities presented by the legislation.
This document provides an overview of investment fund structures in India and compliance requirements. It discusses various types of fund vehicles like offshore and onshore funds. It also covers key areas like choice of fund jurisdiction, documentation requirements, registration and approvals with Indian regulators, ongoing compliance, and certification needs. The presentation further elaborates on topics like different types of investors in India, tax implications, and investment structures for foreign venture capital investors.
This document provides an overview of IFRS 4 Insurance Contracts. It discusses key aspects of IFRS 4 including the scope, definition of insurance contracts, income recognition, concessions provided, acquisition of insurance entities, deferred acquisition costs, liability adequacy tests, loss reserving, and disclosures. It also provides an overview of the upcoming Phase II changes which will move accounting for insurance contracts towards a fair value approach. Case studies and references are included for additional information.
"AIFMD & Private Equity Managers - An implementation checklist" - Global Pe...GECKO Governance
The new European AIFMD regulations will significantly impact the private equity (PE) industry. The regulations were primarily designed for hedge funds but are being applied wholesale to the private equity industry. Compliance will present a challenge for many PE managers.
In this white paper we will look at the main impacts of AIFMD on private equity managers and what they should be doing to comply
You can sign up for all our Global Perspectives white papers here:- http://lnkd.in/BthCg4
The document provides an overview of the structure and regulatory requirements of mutual funds in India. It discusses the key entities involved like sponsors, trustees, asset management company and their roles and responsibilities.
It outlines the regulatory prescriptions for trustees, including qualification criteria for trustee directors. It also summarizes the rights and obligations of trustees under the regulations, including oversight of the AMC, compliance with investment restrictions, and reporting requirements.
Finally, it mentions the regulatory provisions that must be fulfilled for approval of an AMC, including qualification criteria for AMC directors.
This document provides an overview of the remuneration rules for alternative investment fund managers (AIFMs) under the Alternative Investment Fund Managers Directive (AIFMD). It summarizes the key requirements for AIFM remuneration policies including identifying "identified staff", ensuring remuneration is appropriately risk-adjusted, requiring a portion of variable pay be deferred, and disclosure of remuneration practices. The document also discusses proportionality principles, where requirements can be tailored based on the size, nature and complexity of the AIFM. Overall, the guidelines aim to ensure remuneration structures do not encourage excessive risk taking and are consistent with other financial sector regulations.
Hedge Funds & AIFMD - what you should be doing to comply - Part 2 GECKO Governance
This is the second of our two part white paper covering AIFMD and what fund managers should be doing to comply. It is available here - http://lnkd.in/A4VeHz
The first part of this white paper (available here http://lnkd.in/ti3S37) examined many of the main areas fund managers should be reviewing to comply with AIFMD. This included identifying the AIFM, leverage calculations, fund manager authorization, depository selection, remuneration policies, and the requirements for non-European managers.
The second part of this white paper will look at the other important areas of the directive and what is required. These include fund domiciliation, manager liability, reporting requirements, managing illiquid investments and opportunities presented by the legislation.
This document provides an overview of investment fund structures in India and compliance requirements. It discusses various types of fund vehicles like offshore and onshore funds. It also covers key areas like choice of fund jurisdiction, documentation requirements, registration and approvals with Indian regulators, ongoing compliance, and certification needs. The presentation further elaborates on topics like different types of investors in India, tax implications, and investment structures for foreign venture capital investors.
This document provides an overview of IFRS 4 Insurance Contracts. It discusses key aspects of IFRS 4 including the scope, definition of insurance contracts, income recognition, concessions provided, acquisition of insurance entities, deferred acquisition costs, liability adequacy tests, loss reserving, and disclosures. It also provides an overview of the upcoming Phase II changes which will move accounting for insurance contracts towards a fair value approach. Case studies and references are included for additional information.
AIFMD Surgery Webinars: Remuneration Code; Regulatory and Tax ImplicationsCordium
This document outlines an agenda for an AIFMD webinar on remuneration code, regulatory, and tax implications. The webinar covers an overview of the AIFMD remuneration code, remuneration and tax issues, the code in Malta, and concludes with a panel discussion on aspects not addressed in the code. Speakers from Cordium will discuss topics like the remuneration code requirements, proportionality principles, identifying staff, risk alignment, and disclosure obligations. They will also cover delegating functions and how the rules apply, as well as taxation of deferred remuneration for corporate and LLP structures.
Aifmd level 2 measures december 2012 cummings finalCummings
The document summarizes key aspects of the Level 2 Measures implementing the Alternative Investment Fund Managers Directive (AIFMD). It describes how the Level 2 Measures provide details on calculating assets under management, leverage, additional capital requirements, general operating conditions, and delegation of functions for alternative investment fund managers (AIFMs) and their funds (AIFs). The Level 2 Measures aim to create a harmonized framework for regulating AIFMs across the EU and ensure high levels of investor protection.
Corporate Finance - Unit 1 Industrial financeGanesha Pandian
This document discusses various topics related to corporate finance in India, including:
1. It provides an overview of the Indian capital market, sources of corporate financing, and the role of regulatory bodies like SEBI.
2. It describes different financial instruments like equity shares, debentures, preference shares, and hybrid securities. It also discusses debt financing through term loans.
3. It explains key components of the Indian financial system including financial markets, intermediaries, and various types of markets like money market and capital market.
This document provides an overview of the IASB and FASB joint insurance project to develop an international accounting standard for insurance contracts. It summarizes the phases of the project, key requirements of the interim standard IFRS 4, and highlights of the accounting and disclosure requirements for insurance contracts under IFRS 4.
This document provides an overview of IFRS 9: Financial Instruments. IFRS 9 addresses the classification and measurement of financial instruments, impairment of financial assets, and hedge accounting. The key topics covered in IFRS 9 include recognition and derecognition of financial instruments, classification of financial assets and liabilities, measurement of financial instruments, impairment of financial assets, embedded derivatives, and hedge accounting. IFRS 9 establishes principles for the financial reporting of financial assets and financial liabilities.
How to Structure a Venture Capital Fund by Himanshu MandaviaStartupCentral
This document discusses structuring and regulations for venture capital funds in India. It outlines typical fund structures involving investors, a pooling vehicle like an AMC, and target companies. It also summarizes the key Alternative Investment Fund (AIF) regulations introduced by SEBI in 2012, including the three categories of AIFs and conditions applying to all AIFs like minimum corpus, maximum investors, and sponsor contribution. The document also discusses foreign investment in the domestic pooling vehicles, noting that FIPB approval is not required if set up as a Category I AIF company but is required for trusts or other AIF categories.
Alternate investments - Other Asset classesBFSI academy
This document discusses various types of alternative investments that can be used to diversify an investment portfolio beyond traditional stocks and bonds. It describes private equity, real estate, commodities, and art/antiques as common alternative investment classes. For each class, it provides details on investment vehicles, strategies, and limitations to consider. Private equity is structured through limited partnerships that invest capital over fund life cycles. Real estate exposure can come through direct property purchases, real estate funds, or real estate investment trusts. Commodities can be invested in physically or through commodity derivatives.
The document discusses retirement planning and sources of retirement funding in Malaysia. It outlines the importance of retirement planning and identifies some common pitfalls like starting too late, saving too little, and investing too conservatively. The main sources of retirement funding discussed are the Employees Provident Fund (EPF), private retirement schemes, and the civil service pension scheme. Details are provided on contribution rates and withdrawal options for the EPF, which is the largest provident fund in Malaysia.
This document provides an overview of the Internal Capital Adequacy Assessment Process (ICAAP) under Basel II Pillar 2 requirements. It discusses the purpose of Pillar 2 in complementing Pillar 1 by addressing bank-specific risks. The ICAAP process involves identifying and quantifying all risks, conducting stress tests, and assessing capital adequacy. The document then outlines Bank of Baroda's implementation of ICAAP, including its risk policy, data collection from various departments, and quarterly reporting to internal committees and regulators.
Orascom Telecom Media & Technology Holding (OTMT) stock is recommended as a sell with a target price of EGP0.40 per share, representing a 29% downside. This is based on two valuation scenarios. The base case excludes OTMT's investment in Koryolink, which contributed most of OTMT's revenues and profits, due to sanctions affecting OTMT's control. The best case values Koryolink at an independent valuation but still results in a target price below current levels. Given difficulties exercising control over assets and visibility, it is recommended to sell OTMT now.
The document provides an overview of the Egyptian stock market (EGX) including:
1) It describes the key products and services offered by EGX such as stocks, bonds, funds, and structured products.
2) It outlines EGX's strategy to enhance regulations, trading platforms, economic welfare, and promotional activities.
3) It summarizes the listing process and requirements for companies to be listed on EGX as well as the role of listing agents.
This standard provides guidance on disclosure requirements for financial instruments. It aims to enable users to understand the significance of financial instruments for an entity's financial position and performance, as well as the nature and extent of risks arising from financial instruments. Key disclosure requirements include information on classes of financial assets and liabilities, fair value measurements, credit risk, liquidity risk, market risk, and hedge accounting. The standard requires both qualitative and quantitative disclosures to provide a comprehensive picture of an entity's exposure to various risks from its use of financial instruments.
The document provides an overview and summary of key aspects of IFRS 11 Joint Arrangements. IFRS 11 establishes principles for financial reporting by entities that have an interest in arrangements that are controlled jointly. It defines a joint arrangement as one over which two or more parties have joint control, and requires the arrangement to be classified as either a joint operation or a joint venture based on the rights and obligations of the parties to the arrangement. For a joint operation, the parties recognize their assets, liabilities, revenues and expenses. For a joint venture, the parties recognize an investment accounted for using the equity method.
This document provides an overview of venture capital, including its meaning, characteristics, advantages, stages of financing, investment process, development in India, and rules and regulations. It defines venture capital as funds made available for startups and small businesses with high growth potential. Key points include: venture capitalists provide long-term equity financing and business assistance in exchange for equity; the investment process involves deal origination, screening, due diligence, structuring, and exit; and venture capital in India is regulated by SEBI and income tax acts which provide tax exemptions.
Mutual funds are investment vehicles that pool money from many investors to purchase securities like stocks and bonds. They are established under the Indian Trust Act and regulated by SEBI. Key parties involved include sponsors, trustees, asset management companies, custodians and other functionaries. Mutual funds are classified based on their structure (open-end, close-end, interval) and investment objectives (growth, income, balanced, etc.). Benefits include suitability for small investors, risk management, lower costs, and liquidity.
This document provides an overview of accounting for financial instruments under IFRS 9. It discusses key aspects such as classifying financial instruments, recognizing and derecognizing financial assets, and impairment of financial assets. The document defines various financial instruments and outlines their classification and measurement. It describes the criteria for classifying financial assets as amortized cost, fair value through other comprehensive income, or fair value through profit or loss depending on contractual cash flow characteristics and business models. The derecognition principles for financial assets and continuing involvement are also summarized.
The document provides frequently asked questions and answers regarding Alternative Investment Funds (AIFs) regulated by SEBI. It defines an AIF and explains the different categories of AIFs. It also summarizes the registration process, operational requirements, and reporting obligations for AIFs. Key points covered include types of AIFs, minimum investment amounts, sponsorship requirements, and disclosure obligations to investors.
Financial Instruments - Introduction - CA Pooja GuptaPooja Gupta
The document discusses financial instruments and their accounting treatment under Indian Accounting Standards. It defines financial instruments and covers their classification as financial assets, financial liabilities or equity. It discusses recognition, measurement, impairment and derecognition of financial instruments. The presentation also covers debt vs equity classification, compound financial instruments and accounting for derivatives like forward contracts.
The document discusses how the Alternative Investment Fund Managers Directive (AIFMD) affects private equity fund managers in Europe. It affects managers who control over €500 million in assets or offer redemption rights within 5 years. It requires authorization, adherence to operating conditions, limits on delegation, and appointing a depositary. Managers must monitor assets, maintain capital reserves, implement risk management, and comply with new transparency and reporting rules. The directive aims to harmonize regulation of alternative investment fund managers across the EU.
The document discusses the implications of the Alternative Investment Fund Managers Directive (AIFMD) for private equity fund managers. Some key points:
1) The AIFMD applies to EU-based fund managers and non-EU managers who market funds in the EU. It affects private equity fund managers who manage over €500M in assets.
2) The AIFMD aims to regulate Alternative Investment Fund Managers (AIFMs) and provide investor protection. It establishes rules around calculating assets, capital requirements, operating conditions, and delegation.
3) Private equity fund managers caught by the AIFMD must comply with rules relating to risk management, liquidity, valuation, and more. They will also need a
AIFMD Surgery Webinars: Remuneration Code; Regulatory and Tax ImplicationsCordium
This document outlines an agenda for an AIFMD webinar on remuneration code, regulatory, and tax implications. The webinar covers an overview of the AIFMD remuneration code, remuneration and tax issues, the code in Malta, and concludes with a panel discussion on aspects not addressed in the code. Speakers from Cordium will discuss topics like the remuneration code requirements, proportionality principles, identifying staff, risk alignment, and disclosure obligations. They will also cover delegating functions and how the rules apply, as well as taxation of deferred remuneration for corporate and LLP structures.
Aifmd level 2 measures december 2012 cummings finalCummings
The document summarizes key aspects of the Level 2 Measures implementing the Alternative Investment Fund Managers Directive (AIFMD). It describes how the Level 2 Measures provide details on calculating assets under management, leverage, additional capital requirements, general operating conditions, and delegation of functions for alternative investment fund managers (AIFMs) and their funds (AIFs). The Level 2 Measures aim to create a harmonized framework for regulating AIFMs across the EU and ensure high levels of investor protection.
Corporate Finance - Unit 1 Industrial financeGanesha Pandian
This document discusses various topics related to corporate finance in India, including:
1. It provides an overview of the Indian capital market, sources of corporate financing, and the role of regulatory bodies like SEBI.
2. It describes different financial instruments like equity shares, debentures, preference shares, and hybrid securities. It also discusses debt financing through term loans.
3. It explains key components of the Indian financial system including financial markets, intermediaries, and various types of markets like money market and capital market.
This document provides an overview of the IASB and FASB joint insurance project to develop an international accounting standard for insurance contracts. It summarizes the phases of the project, key requirements of the interim standard IFRS 4, and highlights of the accounting and disclosure requirements for insurance contracts under IFRS 4.
This document provides an overview of IFRS 9: Financial Instruments. IFRS 9 addresses the classification and measurement of financial instruments, impairment of financial assets, and hedge accounting. The key topics covered in IFRS 9 include recognition and derecognition of financial instruments, classification of financial assets and liabilities, measurement of financial instruments, impairment of financial assets, embedded derivatives, and hedge accounting. IFRS 9 establishes principles for the financial reporting of financial assets and financial liabilities.
How to Structure a Venture Capital Fund by Himanshu MandaviaStartupCentral
This document discusses structuring and regulations for venture capital funds in India. It outlines typical fund structures involving investors, a pooling vehicle like an AMC, and target companies. It also summarizes the key Alternative Investment Fund (AIF) regulations introduced by SEBI in 2012, including the three categories of AIFs and conditions applying to all AIFs like minimum corpus, maximum investors, and sponsor contribution. The document also discusses foreign investment in the domestic pooling vehicles, noting that FIPB approval is not required if set up as a Category I AIF company but is required for trusts or other AIF categories.
Alternate investments - Other Asset classesBFSI academy
This document discusses various types of alternative investments that can be used to diversify an investment portfolio beyond traditional stocks and bonds. It describes private equity, real estate, commodities, and art/antiques as common alternative investment classes. For each class, it provides details on investment vehicles, strategies, and limitations to consider. Private equity is structured through limited partnerships that invest capital over fund life cycles. Real estate exposure can come through direct property purchases, real estate funds, or real estate investment trusts. Commodities can be invested in physically or through commodity derivatives.
The document discusses retirement planning and sources of retirement funding in Malaysia. It outlines the importance of retirement planning and identifies some common pitfalls like starting too late, saving too little, and investing too conservatively. The main sources of retirement funding discussed are the Employees Provident Fund (EPF), private retirement schemes, and the civil service pension scheme. Details are provided on contribution rates and withdrawal options for the EPF, which is the largest provident fund in Malaysia.
This document provides an overview of the Internal Capital Adequacy Assessment Process (ICAAP) under Basel II Pillar 2 requirements. It discusses the purpose of Pillar 2 in complementing Pillar 1 by addressing bank-specific risks. The ICAAP process involves identifying and quantifying all risks, conducting stress tests, and assessing capital adequacy. The document then outlines Bank of Baroda's implementation of ICAAP, including its risk policy, data collection from various departments, and quarterly reporting to internal committees and regulators.
Orascom Telecom Media & Technology Holding (OTMT) stock is recommended as a sell with a target price of EGP0.40 per share, representing a 29% downside. This is based on two valuation scenarios. The base case excludes OTMT's investment in Koryolink, which contributed most of OTMT's revenues and profits, due to sanctions affecting OTMT's control. The best case values Koryolink at an independent valuation but still results in a target price below current levels. Given difficulties exercising control over assets and visibility, it is recommended to sell OTMT now.
The document provides an overview of the Egyptian stock market (EGX) including:
1) It describes the key products and services offered by EGX such as stocks, bonds, funds, and structured products.
2) It outlines EGX's strategy to enhance regulations, trading platforms, economic welfare, and promotional activities.
3) It summarizes the listing process and requirements for companies to be listed on EGX as well as the role of listing agents.
This standard provides guidance on disclosure requirements for financial instruments. It aims to enable users to understand the significance of financial instruments for an entity's financial position and performance, as well as the nature and extent of risks arising from financial instruments. Key disclosure requirements include information on classes of financial assets and liabilities, fair value measurements, credit risk, liquidity risk, market risk, and hedge accounting. The standard requires both qualitative and quantitative disclosures to provide a comprehensive picture of an entity's exposure to various risks from its use of financial instruments.
The document provides an overview and summary of key aspects of IFRS 11 Joint Arrangements. IFRS 11 establishes principles for financial reporting by entities that have an interest in arrangements that are controlled jointly. It defines a joint arrangement as one over which two or more parties have joint control, and requires the arrangement to be classified as either a joint operation or a joint venture based on the rights and obligations of the parties to the arrangement. For a joint operation, the parties recognize their assets, liabilities, revenues and expenses. For a joint venture, the parties recognize an investment accounted for using the equity method.
This document provides an overview of venture capital, including its meaning, characteristics, advantages, stages of financing, investment process, development in India, and rules and regulations. It defines venture capital as funds made available for startups and small businesses with high growth potential. Key points include: venture capitalists provide long-term equity financing and business assistance in exchange for equity; the investment process involves deal origination, screening, due diligence, structuring, and exit; and venture capital in India is regulated by SEBI and income tax acts which provide tax exemptions.
Mutual funds are investment vehicles that pool money from many investors to purchase securities like stocks and bonds. They are established under the Indian Trust Act and regulated by SEBI. Key parties involved include sponsors, trustees, asset management companies, custodians and other functionaries. Mutual funds are classified based on their structure (open-end, close-end, interval) and investment objectives (growth, income, balanced, etc.). Benefits include suitability for small investors, risk management, lower costs, and liquidity.
This document provides an overview of accounting for financial instruments under IFRS 9. It discusses key aspects such as classifying financial instruments, recognizing and derecognizing financial assets, and impairment of financial assets. The document defines various financial instruments and outlines their classification and measurement. It describes the criteria for classifying financial assets as amortized cost, fair value through other comprehensive income, or fair value through profit or loss depending on contractual cash flow characteristics and business models. The derecognition principles for financial assets and continuing involvement are also summarized.
The document provides frequently asked questions and answers regarding Alternative Investment Funds (AIFs) regulated by SEBI. It defines an AIF and explains the different categories of AIFs. It also summarizes the registration process, operational requirements, and reporting obligations for AIFs. Key points covered include types of AIFs, minimum investment amounts, sponsorship requirements, and disclosure obligations to investors.
Financial Instruments - Introduction - CA Pooja GuptaPooja Gupta
The document discusses financial instruments and their accounting treatment under Indian Accounting Standards. It defines financial instruments and covers their classification as financial assets, financial liabilities or equity. It discusses recognition, measurement, impairment and derecognition of financial instruments. The presentation also covers debt vs equity classification, compound financial instruments and accounting for derivatives like forward contracts.
The document discusses how the Alternative Investment Fund Managers Directive (AIFMD) affects private equity fund managers in Europe. It affects managers who control over €500 million in assets or offer redemption rights within 5 years. It requires authorization, adherence to operating conditions, limits on delegation, and appointing a depositary. Managers must monitor assets, maintain capital reserves, implement risk management, and comply with new transparency and reporting rules. The directive aims to harmonize regulation of alternative investment fund managers across the EU.
The document discusses the implications of the Alternative Investment Fund Managers Directive (AIFMD) for private equity fund managers. Some key points:
1) The AIFMD applies to EU-based fund managers and non-EU managers who market funds in the EU. It affects private equity fund managers who manage over €500M in assets.
2) The AIFMD aims to regulate Alternative Investment Fund Managers (AIFMs) and provide investor protection. It establishes rules around calculating assets, capital requirements, operating conditions, and delegation.
3) Private equity fund managers caught by the AIFMD must comply with rules relating to risk management, liquidity, valuation, and more. They will also need a
AIFMD Depositary - Developing an Operating ModelGECKO Governance
This whitepaper is co-authored by Shane Brett, Managing Director at Global Perspectives, an Asset Management and Hedge Fund consultancy and Alan Meaney, Director at Fund Recs, a specialist software provider to the Funds Industry.
During the past six months Shane and Alan have held discussions with 30+ depositary firms around their plans for implementing AIFMD and how their framework for day to day activities might look.
This document covers AIFMD from the perspective of a depositary and discusses some of the practicalities in setting up an operating model in order to comply with the directive on a day to day basis.
What you'll learn
•The difference between Full Depositary and Depositary 'Lite'.
•Each of the Directives requirements that apply to depositaries.
•The operational considerations a depositary must look at.
The document discusses the key aspects and requirements of the Alternative Investment Fund Managers Directive (AIFMD), an EU directive that introduces a regulatory framework for managers of alternative investment funds. It covers topics such as what an alternative investment fund (AIF) and its manager (AIFM) are, the authorization process for AIFMs, capital requirements, conduct standards, transparency and reporting obligations, and the impact on areas like documentation, service providers, and marketing. Managers have until July 2014 to comply with the new rules by becoming authorized or ensuring any entities managing AIFs meet the regulatory standards.
"AIFMD for Americans - what non-EU managers need to do to comply"GECKO Governance
AIFMD can be confusing for those of us in Europe so it is not surprising that the regulation has caused plenty of head scratching across the Atlantic and around the world.
This white paper provides a clear guide to what U.S. (and Asian managers) need to do to comply with the AIFMD regulations. This is vital if they want to be able to continue marketing their funds into the huge European market.
To sign up for all our free white papers go to:-
http://www.globalperspective.co.uk/#!whitepapers/c1a4e
Or email:-
shane@globalperspectives.co.uk
This is a white paper authored in 2013 on behalf of Confluence Technologies, Inc. of Pittsburgh. It addresses the dynamic behind a new regulatory reporting requirement for alternative asset managers (hedge funds, etc.). Since it was produced under contract, the article byline was set to that of a Confluence employee.
Alternative Investment Fund Regulation 2011Karthik Deep
The proposed SEBI AIF regulation aims to regulate alternative investment funds in India while allowing qualified investors access to alternative assets. It defines high net worth individuals, sets minimum investment amounts, and categorizes different investment strategies. The regulation imposes reporting requirements on funds related to risks, conflicts of interest, financial statements, and investments. It also clarifies tax treatment and ensures harmonization with other regulations to provide a consistent framework for alternative investments while protecting retail investors.
Regulatory Reporting - Key considerations for Fund Managers and Service Provi...GECKO Governance
The growth of numerous regulatory initiatives over the last few years has led to a number of new reporting requirements for fund managers globally. These include Form PF, AIFMD and EMIR.
This new Grant Thornton article examines various operational and implementation challenges fund managers and service providers are currently navigating in order to comply with these new reporting requirements.
- A survey was conducted of pension fund stakeholders following an education session on the upcoming EMIR regulations in Europe regarding OTC derivatives.
- Key findings from the survey showed that a majority of respondents felt their pension funds were underprepared for EMIR implementation and that it was urgent to take action to address the issues. Additionally, almost all respondents felt EMIR would not provide overall cost benefits to pension funds.
- The requirement to post cash as variation margin for cleared trades was identified as the biggest implication of the new regulations according to most respondents. The majority also planned to clear transactions ahead of the exemption deadline rather than use the pension fund exemption.
Michael Spieler, a Treasury Perspectivechrisnolan4
Central clearing of derivatives introduces new challenges for non-financial companies. Margin requirements affect liquidity and introduce uncertainty around daily cash needs. Non-financial companies often take directional positions when hedging underlying business risks, which can lead to significant margin calls. Most non-financials lack access to central bank liquidity and hold limited cash on their balance sheets. As a result, margin requirements increase hedging costs and could influence investment strategies. Non-financials must also understand clearing bank credit risk and set up objectives for preferred clearing arrangements.
The impact of AIFMD
Research survey 2014
In the last two months prior to the expiration of AIFMD’s transition
period IFI Global conducted a wide ranging qualitative research
survey with alternative fund managers, and other key opinion
formers, on the Directive’s anticipated impact on the industry.
The goal of this research is to find out how alternative managers,
and their service providers, expect that they will be affected by
the Directive. Whilst AIFMD’s introduction has been debated
for many years there has been little to no research, prior to this
survey, on what material impact the Directive will have on individual
businesses.
The UK asset management industry is significant globally and in Europe, managing over $8 trillion in assets. As the UK leaves the EU, UK asset managers face uncertainties around how they will be able to distribute funds into European markets without passporting rights. There are two approaches firms are taking - waiting for more regulatory clarity or proactively building out European operations. Effectively distributing in Europe likely requires a local presence, as clients prefer regional familiarity. Firms need to determine if a European strategy can generate growth and be cost-efficiently managed.
A joint Directors and Officers as well as Errors and Omissions policy outline for hedge funds. The D.&.O. policy applies at the partnership level, while the E.&.O. piece covers portfolio managers and analysts. Please refere to the article penned by Mr Andrew Ross Sorkin in the 'New York Times'.
https://www.nytimes.com/2021/03/29/business/dealbook/credit-suisse-nomura-archegos.html
The document provides an overview of how mutual funds work, including their rationale, governance structure, types of schemes, and key concepts like net asset value. Some key points:
- Mutual funds allow small investors to achieve diversification and professional management that individual investing does not enable.
- Funds are structured with boards of trustees, asset management companies, and unitholders. SEBI regulations govern their operations.
- Major scheme types include equity, bond, balanced, and money market funds. Equity schemes make up the largest portion of assets.
- Index funds aim to track market indices at low cost but are not very popular in India yet.
- Net asset value (NAV
Forward-Looking Practices in Wealth ManagementCognizant
To keep up with growing regulations in wealth management sector, firms need to future-proof their operations with a robust risk-control system and transparent trading practices.
AIFMD: Marketing funds into the UK and EEA for US managersCummings
The Alternative Investment Fund Managers Directive (AIFMD) came into force in 2013, requiring authorization for managers marketing alternative investment funds in the EU. For US managers marketing non-EU funds in the UK and EEA, they must comply with private placement regimes until at least 2018. Currently, US managers can continue marketing under private placement rules by meeting conditions on cooperation agreements, FATF designation, and AIFMD disclosure/reporting rules. Marketing across the EEA varies depending on transitional relief periods and whether private placement regimes remain, so managers must research local rules.
Legal shorts 25.07.14 including AIFM partnership tax changes and FCA update o...Cummings
This document provides a weekly legal briefing on recent developments in the financial services industry from Cummings Law, including changes to taxation rules for AIFM partnerships, updates from the FCA on AIFMD applications and ESMA guidance, adoption of the UCITS V Directive, ESMA discussion on EMIR clearing rules for UCITS, new CRD IV directorship limits, an HM Treasury report on EU financial services competences, an OECD standard for automatic tax information exchange, and reform recommendations for interest rate benchmarks from the FSB.
This survey examined risk management practices of non-financial companies in Belgium related to interest rate and foreign exchange risk. The key findings were:
- Most companies face interest rate and foreign exchange risk and manage this risk using derivatives like interest rate swaps and FX forwards. Stabilizing cash flows and earnings were the primary risk management objectives.
- Since 2008, the majority of companies reported no change in their risk tolerance or use of derivatives, contrary to data showing decreased derivatives volumes.
- Companies generally have hedging policies in place, especially for foreign exchange risk, but many policies are not formally written down.
- Large companies typically allow less latitude in hedging decisions than smaller companies. Public entities
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This Fund Regulation 2015 update covers key updates from the main pieces of regulation impacting the investment fund industry this year.
Key regulatory updates include:
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"Hedge Funds & AIFMD - what you should be doing to comply" - Global Perspectives white paper - May 2013
1. Date 2 May 2013
AIFMD – what you
should be doing to
comply
By Shane Brett,
Managing Director
Global Perspectives
www.globalperspective.co.uk
A Global Perspectives White Paper
2. Contents
Introduction 2
1. Identifying the AIFM 2
2. Depository Selection 3
3. Authorisation 3
4. Third Country provisions 4
5. Delegation and Due Diligence 4
6. Remuneration policies 5
7. Leverage 5
8. Conclusion 5
Introduction
The AIFMD regulation comes into force
in the 27 countries of the European
Union in July 2013. The main tenets of
this wide ranging legislation are now
well known throughout the industry.
Put simply, AIFMD will change the
alternative investment industry forever.
This is the first in a 2 part Global
Perspectives white paper examining
what fund managers should be doing
right now to ensure they are ready for
AIFMD. We will publish Part 2 of this
white paper next month (June 2013).
Currently fund managers should be
completing a detailed impact
assessment to ensure they are ready for
AIFMD. Global Perspectives
(www.globalperspective.co.uk) can
assist in completing your AIFMD impact
assessment and implementing its
requirements.
1. Identifying the AIFM
The very first AIFMD task an Alternative
Investment Fund Manager (AIFM) must
complete is to identify who the fund
manager really is. The correct AIFM
must be identified for each Alternative
Investment Fund (AIF) in the
investment group.
This is crucial because this AIFM will be
the one legally responsible for ensuring
the AIF is compliant with all AIFMD
regulations.
Due to the complex structure of many
asset management groups this
identification process may not be
straight forward. Nevertheless this
3. Global Perspectives
www.globalperspective.co.uk
Email: Shane@globalperspective.co.uk
Phone: +44 (0) 20 3239 2843
process must be completed
urgently as so many of AIFMD
numerous regulatory
requirements stem from this.
AIFMD establishes a vague test
for establishing the AIFM. The
primary consideration is which
entity carries out the funds’”
“investment management
functions”.
This is proving problematic for
European “managed account”
products.
2. Depository Selection
Under the AIFMD regulations
every AIFM must appoint a
“depositary” to safeguard the
investors in their funds. These
will work like super-charged
custodians who will closely
monitor the assets in the fund,
reconcile daily cash movements
and provide independent
verification that the fund is being
run properly and the assets are
where the manager says they
are.
The depository will be wholly
liable to the funds investors and
is assuming a very wide
responsibility of legal liability by
taking on this role (they are on
the hook even if the problem is in
a sub-custody network outside of
their control). Consequently only
large companies with deep
pockets will be able to offer this
service (often tier 1
administrators who are part of
global banks). One bankrupt fund
could easily bring down a large
bank. Depositories are expected
to charge handsomely for this
mandatory service.
Right now managers need to be actively
engaged in the depository selection
process. Managers should have begun
this selection process already, as it will
take time and is an important
investment decision.
Some depositories may not be willing to
support an investment strategy
weighted towards emerging markets or
exotic securities. For managers the
selection of a suitable, cost effective
depository aligned to their investment
strategy will be a key consideration.
For hedge fund and private equity
managers the cost and intrusive nature
of the new depository regime is a sea
change in operational practise.
3. Authorisation
All European AIFM’s must apply from
authorisation from their home country
regulators before July 22nd 2014 (i.e.
one year after AIFMD becomes law
throughout the European Union).
This approval process is not yet clear in
key hedge fund jurisdictions like the UK
(where over 80% of European hedge
funds are based). The application for
approval will likely require the fund
manager to demonstrate full compliance
with the 116 Articles of AIFMD.
Managers must be familiarising
themselves with the full spectrum of
AIFMD and how it will impact their
business. This includes everything from
depository requirements to
remuneration rules, to leverage
calculations and fund services
delegation.
4. Global Perspectives
www.globalperspective.co.uk
Email: Shane@globalperspective.co.uk
Phone: +44 (0) 20 3239 2843
The extensive scope of this
analysis may require the
engagement of specialist
consulting expertise to assist in
analysing the business impact of
AIFMD.
Global Perspectives can provide
full support in your AIFMD impact
analysis.
4. Third Country provisions
AIFMD applies to any non-UCITS
fund managed or marketed in
the European Union. The rest of
the world is slowly waking up to
this.
Let us be clear – the non-
European world will have to
comply with AIFMD’s
requirements. The process for
these “Third Countries” will be
phased and gradual between now
and 2018, but going forward if a
non-European manager even
wants to road show a hedge fund
in Europe they will have to be
fully AIFMD compliant.
Non-EU managers should be
reviewing AIFMD to understand
their initial requirements. They
face a phased compliance period
until the current regime expires
in 2018. The initial rules require
non-EU managers to provide
“transparency reporting” with
details of the fund, its investment
strategy and its investments. This
includes private equity funds.
Further, more detailed,
obligations will follow over the
next 5 years.
Non-compliance with AIFMD will mean
being locked out of the world largest
trading block.
The rest of the world should think of
AIFMD like a European FATCA. i.e. non-
Europeans are being given no choice but
to fall into line and comply with AIFMD -
just like the rest of the world had no
choice but to comply with the US FATCA
rules - whether they liked it or not.
5. Delegation and Due Diligence
AIFMD has new rules around what is
required when a manager delegates
some of its duties to a 3rd party. This
obviously includes an investment
adviser or fund administrator.
These rules make the manager directly
responsible for the oversight of these
parties. AIFMD requires substantial
initial and on-going due diligence
required on all service providers.
Service providers themselves are also
now required now to complete extensive
due diligence on their manager/client so
managers need to be ready to
accommodate these requests and
meetings.
Managers should currently be engaged
in this due diligence process for both
new (e.g. depositories) and existing
(e.g. fund administrators) fund service
providers. Also it should be noted that
AIFMD contained additional, more
detailed rules regarding the delegations
of portfolio or risk management
functions outside the European Union.
Managers need to be considering these
additional requirements if they delegate
these functions.
The cumbersome nature of these due
diligence visits and checks may mean
managers or service providers will want
5. Global Perspectives
www.globalperspective.co.uk
Email: Shane@globalperspective.co.uk
Phone: +44 (0) 20 3239 2843
to outsource this activity. Global
Perspectives can provide you with
full support for these due
diligence requirements.
6. Remuneration policies
Some of AIFMD’s most
controversial new rules are
around the area of hedge fund
remuneration. They require fund
manager remuneration policies to
be disclosed to investors and
regulators.
Remuneration must also be
weighted towards long-term
incentives. This means that
employees must be paid at least
half their bonus as shares in the
fund. Furthermore they are not
allowed to sell those shares for a
minimum of 3 (and preferably 5)
years.
AIFMs are also being asked to
introduce prudent remuneration
policies and organisation
structures to avoid a conflict of
interest or which may encourage
excessive risk-taking. The
implementation of the AIFM’s
remuneration policy must be
reviewed at least annually.
Right now managers need to be
reviewing their internal
remuneration policies and taking
steps to ensure it complies with
AIFMD. In certain cases this will
mean the establishment of a
remuneration committee (if the
managers total AUM is above
€1.25 billion).
All of this represents a huge
change for the remuneration
policies of most European hedge funds.
7. Leverage
AIFMD stipulates two brand new ways to
calculate leverage. These are the
“Gross” & “Commitment” methods.
The “Gross” method attempts to give a
picture of the funds overall exposure.
The “Commitment” method focuses
more on the hedging and netting
techniques used by the fund manager.
The key point here is that these are
new, compulsory methods for leverage
calculation. The more common “Value at
Risk” (VAR) methodology is not
acceptable.
Managers need to be working with their
system vendors and internal
departments to ensure these
calculations are built into their software
applications. They also need to be
making initial leverage calculations
using these new methodologies in
preparation for AIFMD.
This is important because managers will
have to report leverage to their home
regulators and to investors. They will
also have to monitor it closely and
advise investors if they breach their
stated leverage threshold.
8. Conclusion
The reward for complying with all of
AIFMD’s requirements will be an EU
“Passport” to offer alternative
investments across Europe, similar to
that of the existing UCITS Passport.
Over time this passport may become
the new “gold standard” of alternative
investment products and open up new
6. Global Perspectives
www.globalperspective.co.uk
Email: Shane@globalperspective.co.uk
Phone: +44 (0) 20 3239 2843
global opportunities to the
industry (e.g. in Asia and Latin
America)
Part 2 of this white paper
(released in June 2013) will
address the other main AIFMD
requirements that managers
should be addressing. These will
include:-
· Fund domiciliation,
· Fund manager liability,
· Investor and regulatory
reporting,
· Liaising with Service Providers,
· Internal organisational change,
· Managing illiquid investments.
· Market opportunities presented
by AIFMD
As can be seen from this white
paper the demands of AIFMD are
considerable. Global Perspectives
(www.globalperspective.co.uk)
can assist in completing your
AIFMD impact assessment and
implementing its requirements.
Sign up for all Global Perspectives
monthly White Papers at-
http://www.globalperspective.co.uk/#!wh
itepapers/c1a4e
Order the new book (Jan 2013)-
“The Future of Hedge Funds”
By Shane Brett
The last 2 decades have transformed the
Hedge Fund industry from a niche
investment segment to a massive global
industry.
In this excellent and wide-ranging study
of the Hedge Fund industry, Shane Brett
examines the main issues and trends
currently taking place, and analyses how
they will affect the future of the industry.
This includes-
• Changing investor demands across the
industry,
• New regulatory requirements - including
FATCA, AIFMD & the JOBS Act,
• Future operational trends - including
Operational Due Diligence & Managed
Account Platforms,
• Emerging Service Provider opportunities
– including Hedge Fund Administrators,
• Hedge Fund investment strategy -
including new emerging investment
opportunities,
• Best practice change management –
how to manage Hedge Fund industry
change.
7. Global Perspectives
www.globalperspective.co.uk
Email: Shane@globalperspective.co.uk
Phone: +44 (0) 20 3239 2843
The “Future of Hedge Funds” also
examines the current and future
global economic environment and
what this will mean for Hedge
Funds in the years ahead.
Available from Amazon in
paperback here-
www.amazon.com/Future-Hedge-
Funds-Trends-
industry/dp/1481130226/
And for Kindle here-
www.amazon.com/The-Future-
Hedge-Funds-
ebook/dp/B00AHACY8Y