On 30 June 2025, the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) issued a sector letter addressed to alternative investment fund managers (AIFMs) operating under the so-called ‘light’ regime. These light AIFMs are exempt from the licensing requirement under the EU Alternative Investment Fund Managers Directive, provided they meet certain conditions – such as offering fund units to fewer than 150 persons or exclusively to professional investors. Such AIFMs are required to register with the AFM. The AFM has also published the sector letter on its website.
In the sector letter, the AFM highlights seven points that light AIFMs need to pay attention to as they reflect the regulator’s expectations and aim to promote compliance and transparency within this category of fund managers.
- Timely AIFMD reporting
Although light AIFMs benefit from a lighter regulatory regime, they are still required to submit periodic reports to the AFM regarding the funds they manage. The AFM stresses the importance of submitting this information in a timely manner.
- Professional vs. retail investors
The qualification of the investor as a retail or professional investor impacts the scope of the light AIFM’s obligations. The AFM notes that this distinction is not always applied correctly in practice. In particular, the AFM clarifies that wealthy individuals cannot be classified as professional investors, and that retail investors cannot “opt-up” to be a professional investor. The AFM emphasizes that natural persons can under no circumstances be classified as professional investors under the light AIFM regime.
- Key information document
Light AIFMs that offer retail investment products (or insurance-based investment products) are required to provide a key information document (KID) to investors. According to the AFM, not all light AIFMs are complying with this obligation. In some cases, the KID has not been prepared, is not accessible via the AIFM’s website, or the AIFM appears unaware of the requirement altogether.
- Fewer than 150 retail investors
Light AIFMs relying on the exemption for offering fund units to fewer than 150 investors must ensure that the offer is directed at a clearly defined and limited group. The AFM clarifies that the threshold applies to the number of persons to whom the offer is made – not the number of actual investors. Publishing detailed fund information on a publicly accessible website may be considered a public offer to more than 150 persons. The AFM also flags that this condition cannot be circumvented by setting up an alternative structure.
- AML and sanctions
The AFM has identified several deficiencies in how light AIFMs comply with anti-money laundering (AML) and sanctions legislation. Light AIFMs are expected to maintain an up-to-date risk assessment, conduct risk-based customer due diligence on investors and other business relationships, and verify the source of funds. In addition, they must ensure timely and complete responses to the AFM’s periodic AML questionnaires.
- Responsibility of the light AIFM and outsourcing
Light AIFMs remain fully responsible for ensuring that their registration details are accurate and up-to-date, and that they continue to meet the conditions of the AIFMD’s light regime. They are also required to notify both the AFM and their investors of any relevant changes in a timely manner.
The AFM observes that many light AIFMs outsource certain functions, particularly those related to AML compliance, to third-party service providers. While outsourcing is permitted, the AFM emphasizes that ultimate responsibility for compliance always rests with the light AIFM itself. This includes maintaining sufficient in-house knowledge and expertise to oversee outsourced activities effectively.
- Deregistration
If the light AIFM or any of the funds managed by it are no longer active, the AIFM and/or the fund must be deregistered with the AFM. The AFM has observed that a number of registered light AIFMs are inactive in practice. Deregistration prevents the AFM from involving the light AIFM in questionnaires or from establishing violations of the requirements applicable to light AIFMs. As long as the light AIFM is registered with the AFM, all obligations under the AIFMD light regime apply.
The AFM calls on all light AIFMs to review the sector letter and consider whether any business operations should be adjusted or improved.
The sector letter is available here (Dutch only).