ESMA AIFMD passport reviews due in June

The European Commission expects the European Securities and Markets Authority (ESMA) to complete its assessment of whether nine countries are eligible to seek a pan-EU marketing passport provided by the Alternative Investment Fund Managers Directive (AIFMD) by June 30, according to a letter released on Tuesday.

This is sooner than the deadline originally proposed in ESMA’s 2016 Working Program, which stated that the decision on whether or not to extend a passport to third country managers would be due to the European Commission by Q4 2016.

The AIFMD passport will allow non-EU managers the ability to market their funds across the EU, rather than using the national private placement regime (NPPR) for each individual country. 

ESMA began its country-by-country review of regulatory regimes in 2014 with six jurisdictions, and last July deemed Guernsey, Jersey and Switzerland (provided certain legislative changes passed) fit to receive AIFMD passports. The US, Hong Kong and Singapore were also included in that first wave of reviews, but, much to the dismay of fund managers, ESMA stated it needed more time to assess those regimes.

ESMA began its second wave of reviews in October, assessing the Cayman Islands, Japan, Isle of Man, Bermuda, Canada and Australia in addition to the US, Hong Kong and Singapore.

In the letter, the European Commission suggested that ESMA provides more detailed assessments of the capacity of each jurisdiction’s supervisory authorities, along with information on their enforcement track records. In order to assess any potential market disruption from the granting of AIFMD passports, ESMA will also assess the expected inflow of funds into the EU by type and size from the relevant third countries.