On 23 January 2018, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) issued a press release on its website stating that it has concluded an investigation into compliance with statutory requirements regarding sound business conduct, governance and separation of assets by 12 managers of alternative investment funds (AIFMs) that were automatically captured by the EU Alternative Investment Fund Managers Directive in 2014 (the Investigation).
The Investigation has shown that there is substantial room for improvement for this group of AIFMs with regard to sound business operations, governance and asset separation. The most important findings in the Investigation are:
- the risk management of many AIFMs is of insufficient quality;
- outsourcing by a large number of AIFMs does not comply with laws and regulations;
- one AIFM failed to appoint a depositary;
- in some cases there were doubts around the effectiveness and structure of the compliance function;
- conflicts of interest policies were often incomplete; and
- compliance with the anti-money laundering and terrorism financing legislation needs to be improved.
The report of the Investigation contains a number of best practices that the AFM has drawn up as a result of the Investigation. These best practices will assist managers in further improving the quality of their operations and governance. The individual results of the studies were fed back to the investigated AIFMs and, where AIFMs failed to comply with the applicable legal requirements, the AFM applied both formal or informal measures to ensure compliance.
View the AFM’s press release (Dutch only), 24 January 2018.