Publications

In response to the European Commission’s ongoing assessment of the AIFMD, the European Securities and Market Authority published a letter on 18 August 2020 to the Commission highlighting areas where “improvements could be made” to the Directive. As the financial markets regulator for the European Union, the suggestions put forth by ESMA are expected to have significant influence with the Commission. While it is too early to predict whether, and to what extent, the Commission will adopt such recommendations, and if so, in what form, the proposals are noteworthy as they suggest that ESMA views material shortcomings in the AIFMD that ought to be addressed. To the extent that these “improvements” are accepted by the Commission as such, it may also make it more likely that the identified deficiencies will be mitigated through amendment proposals to the Directive. Given the impact of the AIFMD on the alternatives industry—both inside and outside of Europe—sponsors of alternative investment funds should be cognizant of these proposals and remain abreast of developments as they progress through the AIFMD review process. For sponsors of private funds, particularly those outside of the EU, key aspects of the ESMA Letter are described in the linked memorandum.