The EU Commission’s proposals to amend AIFMD and the UCITS Directive

On 25 November 2021, the European Commission published its long-awaited proposal (the Proposal) for a new Directive which would amend the main (‘Level 1’) text of the AIFMD as well as an annex. The Proposal also contained changes to the UCITS Directive’s rules on delegation, liquidity risk management and reporting so it and AIFMD are properly aligned.

Timing

The Proposal will now be reviewed by the EP and Council, and an agreed version negotiated, before the final text is published in the Official Journal. There will then be an implementation period before the new rules come into effect – the Commission is proposing that this should be two years.

Taken together, this means that, realistically, the rules are unlikely to be effective until 2024 or 2025.

What does the Proposal cover?

Although the proposed amendments do not introduce widescale change to the basic AIFMD regime, they do contain a number of points which will be of interest to asset managers.

Our summary looks at what the Proposal says in respect of the following topics:

• Delegation
• Liquidity Management Tools
• Loan originating funds
• Non-Cooperative Tax Jurisdictions
• Depositaries
• Authorisation
• Investor protection
• The marketing passport and the future of NPPRs

In each case, we look at the background, the proposals themselves and set out our view of their likely impact on AIFMs.