FIN.

Update on AIFMD Delegation Rules

The EU has been saying for some time that it wishes to review the rules by which EU AIFMs may delegate investment management to entities outside of the EU.

In its August 2020 letter regarding the review of the AIFMD, ESMA raised concerns that the current delegation rules risk too much being delegated with too little oversight from EU regulators, citing delegation to third parties often outside the AIFM’s Group, with the majority of personnel and IT systems often being outside the EU and subject to different regulatory regimes.

As a considerable number of UK based entities manage the investments of EU AIFs delegation outside the EU increased substantially when full Brexit occurred on 31 December 2020.

Mairead McGuinness (EU financial services commissioner)  has told an Irish Funds event [ that the aim is to propose a legislative amendment to the AIFMD towards the end of the year, and that any changes will be targeted and proportionate to improve clarity and fill in any regulatory gaps.

 

FIN. Team