20/01/2011
By Matt Ritchie
The UK’s Investment Management Association (IMA) is warning against adding too much detail to the Alternative Investment Fund Manager Directive (AIFMD), saying it could cause detriment to investors.
The European Securities and Market’s Authority (ESMA) is consulting on the directive, which aims to create a comprehensive and secure framework for the supervision and prudential oversight of AIFM in the EU.
Once the AIFMD enters into force, all alternative investment fund managers will be required to obtain authorisation and will be subject to ongoing regulation and supervision.
Responding to the consultation, the IMA cited the variation in alternative investment funds and fund managers and warned against introducing too much unnecessary detail.
Director of authorised funds and tax at the IMA Julie Patterson said that the directive covers a “large and varied” range of investment vehicles.
“There are close to 2,000 ‘alternative investment funds’ in the UK alone. IMA members are also the appointed investment managers of a very large number of AIF [alternative investment funds], domiciled in other jurisdictions,” Patterson said.
Further measures should not cut across AIF investors’ ability to access their desired investments and strategies, Patterson said.
“We support the principle of harmonisation, but detailed regulations could cause detriment to investors and run counter to the overarching principles articulated by the Commission.”
Earlier this week, the Alternative Investment Management Association expressed similar sentiments.
Commenting on hedge funds in its response to the consultation, the association said that the majority of hedge fund firms are small businesses and it hoped ESMA would take the sector’s diversity into account when implementing the directive.
AIMA director of policy and government affairs Jiri Krol said: “Flexibility, proportionality and openness are three key features which the regulation should retain if it is to succeed in delivering the policy objectives while preserving the existing breadth of business models and strategies.”
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