In 2016 the European Securities and Markets Authority (ESMA) conducted a study on the operation of home and host responsibilities under the Alternative Investment Fund Directive (AIFMD) and the Undertakings for Collective Investments in Transferable Schemes Directive (UCITS Directive) with a view to promoting smooth operation of the EU passports for marketing and management, looking at the notification frameworks contained in the UCITS Directive and AIFMD.
ESMA has now published the findings of its thematic study on notification frameworks and home-host responsibilities under AIFMD and the UCITS Directive. The report is structured in the following way:
- section 1 of the report illustrates the setting for the thematic study, as well as the procedure;
- section 2 provides an overview on the extent of cross-border management and marketing activities pursued by UCITS and their management companies in the EU, and assesses their supervision under the UCITS Directive. The report identified a number of good practices around supervisory activities by national competent authorities (NCAs), such as: (i) on cross-border services and cross-border collective portfolio management in the home and host Member State of the UCITS management company; (ii) on the supervision of compliance by branches of UCITS management companies when carrying out cross-border activities in a host Member State; and (iii) on the availability of required investor information when a UCITS is marketed on a cross-border basis;
- section 3 looks at cross-border management and marketing activities carried out by alternative investment fund managers (AIFMs) in the EU, and provides an in-depth assessment of the number of issues around supervision of those activities. In this section, good practices are identified regarding the influence of cross-border activity, including collective portfolio management, on the general supervisory approach pursued by NCAs. In addition, good practices are identified in regard to the supervision of compliance of braches of EU AIFMs with the rules of conduct in host Member States of the AIFM, and on the supervision of alternative investment fund marketing activities carried out by AIFs; and
- section 4 provides a number of additional general findings on the administrative procedures around the passporting frameworks at national level. Beside looking at how NCAs receive and transmit passporting notifications, the report also assesses whether, how and to what extend NCAs publish data on cross-border management. Additionally, the report includes a summary of difficulties linked with the day-today operation of the UCITS and AIFMD passporting frameworks, which were identified by competent authorities in the context of the thematic study.