On 10 June 2020, the European Commission published a report assessing the application and scope of the Alternative Investment Fund Managers Directive (AIFMD). The report is prepared in accordance with Article 69 of the AIFMD. The Commission is required to review the application and the scope of the AIFMD with an emphasis on the experience acquired in applying the Directive.

In the report, the findings from earlier study from KPMG are complemented by other sources of information, including relevant data updates and information obtained through various work streams in the Commission, the European Securities and Markets Authority and the European Systemic Risk Board (ESRB).

The report covers the following topics:

  • Impact on alternative investment funds (AIFs) and alternative investment fund managers (AIFMs).
  • Impact on investors.
  • Impact on monitoring and assessment of systemic risk.
  • Impact of rules on investment in private companies and in/or for the benefit of developing countries.

When covering the AIFMD’s impact on AIFs and AIFMs, the report notes, among other things, that the efficacy of the EU AIFM passport is impaired by national gold-plating, divergences in the national marketing rules, varying interpretations of the AIFMD by national supervisors and its limited scope. The Commission did not assess the functioning of the AIFMD third country passport as it has not yet been activated and there was no market information to draw on.

When discussing the AIFMD’s impact on the monitoring and assessment of systemic risk, the report notes, among other things, that:

  • There is no evidence to suggest that the AIFMD thresholds of assets under management , above which the activities of AIFMs may pose significant systemic risk, should be adjusted.
  • As regards leverage calculation methods, in principle, the gross and commitment methods as currently provided for in the AIFM Regulation are judged to be appropriate by many stakeholders. Nevertheless, some adjustments may be called for by the conclusion of the Financial Stability Board’s and IOSCO work in this area, which is focused on data reporting, as well as recommendation of the ESRB for improved measures to asses macro-prudential risks.