AIFM Directive: Marketing Matrix

December 2011

Provisions relating to the managing and marketing of AIFs to professional investors in the EU

There are two methods which allow the managing and marketing of AIFs in the EU by AIFMs. The first method is a marketing “passport” which has been introduced by the AIFM Directive (the “Directive”) to allow AIFs to be marketed to professional investors across the EU subject to certain conditions being met. The second method allows AIFs to be marketed in a specific Member State (“MS”) in accordance with that MS’s private placement regime, subject to certain conditions being met. Each MS will be required to have transposed the provisions of the Directive into national law by July 2013 (the “Final Transposition Date”).

The table below sets out the applicability of the Directive provisions and in particular conditions relating to the availability of the passport or the national private placement regime for marketing of AIFs to professional investors in the EU in the context of both EU and non-EU AIFMs, managing both EU and non-EU AIFs and marketing such AIFs both inside and outside of the EU.

ScenarioApplication of Directive Provisions
Passport RegimeNational Private Placement

EU AIFM managing an EU AIF(whether or not also marketed in the EU)

Articles 31 - 33

A. Applicability of Directive

Directive applies in full, whether the EU AIFs are marketed to EU or non-EU investors.

N/A - marketing in the EU is by means of passport only.

B. Marketing Conditions

EU AIFM may market an EU AIF using the passport (for marketing to EU investors only).

N/A - marketing in the EU is by means of passport only.

C. Timing

Marketing and management services passports available from Final Transposition Date.

N/A - marketing in the EU is by means of passport only.

EU AIFM managing a non-EU AIF marketed in EU

Articles 35 - 36

A. Applicability of Directive

Directive applies in full.

Compliance required with the Directive except full compliance with depositary regime not required, just that third party appointed to perform the functions of the depositary and notified to AIFMs regulator.

B. Marketing Conditions

Passport available subject to the following conditions:

  1. Must be appropriate co-operation arrangements between AIFM's regulator and the third country supervisory authorities;
  2. Third country must not be on FATF blacklist; and
  3. Must be OECD tax agreements between third country where the non-EU AIF is established, the AIFM's MS and each MS where AIF marketed.
  1. Must be appropriate co-operation arrangements between AIFM's regulator and the third country supervisory authorities;
  2. Third country must not be on FATF blacklist.

MS may impose stricter rules on the AIFM in respect of the marketing of non-EU AIFs to investors on their territory.

C. Timing

Marketing passport expected to be available from late 2015.

National private placement regimes are only route to EU investors until marketing passport made available. Dual marketing system expected to operate from late 2015 until early 2019, after which possible end of national private placement regime.

EU AIFM managing a non-EU AIF not marketed in the EU

Article 34

A. Applicability of Directive

  1. Must comply with all Directive requirements, except depositary/annual reporting requirements; and
  2. Must be appropriate co-operation arrangements between AIFM's regulator and the third country supervisory authorities.

B. Marketing Conditions

N/A as no marketing in the EU. Passport not available for marketing to non-EU investors. Marketing to non-EU investors will be subject to local securities laws.

C. Timing

Directive requirements will apply as of Final Transposition Date.

Non-EU AIFM managing an EU AIF (whether or not also marketed in the EU)

Articles 37, 39 and 42

A. Applicability of Directive

Must comply with all provisions of Directive, for which purpose must be authorised in and have a legal representative in MS of reference (limited exception applies where rules incompatible with local laws but where there is compliance with equivalent rules).

Until late 2015, compliance required with annual report, disclosure and reporting requirements in respect of each AIF and, where relevant, obligations for AIFMs managing AIFs which acquire substantial stakes in EU companies.

From late 2015, must comply with all provisions of Directive, for which purpose must be authorised in and have a legal representative in MS of reference (limited exception applies where rules incompatible with local laws but where there is compliance with equivalent rules).

B. Marketing Conditions

Authorisation and passport available subject to the following conditions:

  1. Legal representative to perform (together with AIFM) the compliance function for EU management and marketing activities;
  2. Must be appropriate co-operation arrangements between the authorities in the MS of the EU AIF concerned, the MS of reference and third country where non-EU AIFM is established;
  3. Third country where non-EU AIFM is established must not be on FATF blacklist;
  4. Must be OECD tax agreements between MS of reference and third country where non-EU AIFM is established;
  5. Authorisation and notification provisions equivalent to EU AIFM, subject to procedure for determination of MS of reference; and
  6. No domestic preventions in third country where non-EU AIFM is established on competent authorities’ effective supervision nor limitations in supervisory / investigatory powers of third country authorities.
  1. Must be appropriate co-operation arrangements between the authorities in the MS of the EU AIF concerned, each MS where AIF is marketed and the third country where non-EU AIFM is established. From late 2015, these arrangements must also be in place with the authorities in the non-EU AIFM's MS of reference;
  2. Third country where non-EU AIFM is established must not be on FATF blacklist.
  3. From late 2015, must be OECD tax agreement between third country where the non-EU AIFM is established and its MS of reference, and conditions 1, 5 and 6 (as set out under “Passporting”) will also apply.

When using the national private placement regime, MS may impose stricter rules on the AIFM in respect of the marketing of AIFs to investors on their territory.

C. Timing

If no marketing in the EU, Directive requirements will not apply until late 2015. Until then, national authorisation regimes will apply.

Marketing and management services passports expected to be available from late 2015. Directive requirements will apply from this date, whether or not there is marketing in the EU. These include the requirements to be authorised in and have a legal representative in MS of reference, and for legal representative to perform compliance functions for EU management activities. They also include the requirements for co-operation arrangements, OECD tax agreements and requirements as to FATF blacklist status.

If no marketing in the EU, Directive requirements will not apply until late 2015. Until then, national authorisation regimes will apply.

National private placement regimes are only route to EU investors until marketing passport made available. Dual marketing system expected to operate from late 2015 until early 2019, after which possible end of national private placement regime.

Non-EU AIFM managing a non-EU AIF marketed in the EU

Articles 37, 40 and 42

A. Applicability of Directive

Must comply with all provisions of Directive, for which purpose must be authorised in and have a legal representative in MS of reference (limited exception applies where rules incompatible with local law but where there is compliance with equivalent law).

Compliance required with annual report, disclosure and reporting requirements in respect of each AIF and, where relevant, obligations for AIFM's managing AIF which acquire substantial stakes in EU companies.

B. Marketing Conditions

Authorisation and passport available subject to the following conditions:

  1. Legal representative to perform (together with AIFM) compliance function for EU marketing activities;
  2. Must be appropriate co-operation arrangements between the authorities in the AIFM's MS of reference and those in the third countries where the AIFM and AIF are established.
  3. Third countries where non-EU AIFM and non-EU AIF are established must not be on FATF blacklist;
  4. Must be OECD tax agreements between MS of reference and third countries where the AIF and AIFM are established;
  5. Must be OECD tax agreements between third country where AIF is established and each MS where marketed.
  6. Authorisation and notification procedures equivalent to EU AIFM, subject to procedure for determining MS of reference;
  7. No domestic prevention in third country where non-EU AIFM is established on competent authorities’ effective supervision or limitations on supervising/investigating power of third country authorities.
  1. Must be appropriate co-operation arrangements between the authorities of each MS where the non-EU AIF is marketed and those in the third countries where the AIFM and the AIF are established.
  2. Third countries where the non-EU AIF and non-EU AIFM are established must not be on FATF blacklist.

MS may impose stricter rules on the AIFM in respect of the marketing of AIFs to investors on their territory.

C. Timing

Marketing and management services passports expected to be available from late 2015.

Dual marketing system expected to operate from late 2015 until early 2019, after which possible end of national private placement regime.