From dms

The implementation of the Alternative Investment Fund Managers Directive (AIFMD) is in effect.

Generally a non-EU alternative investment fund manager (non-EU AIFM) who wishes to market into the European Economic Area (EEA) will need to be AIFMD compliant. A study released in June found that 85% of alternative investment managers were not prepared for the new reporting requirements under AIFMD.1

Marketing an Offshore Fund in Europe

Until recently, marketing offshore funds to European investors was straight forward. As of July 22, 2013, European regulators put the directive into law and require non-EU AIFMs that market to the EEA to be compliant with a new range of regulations. The AIFMD will test the operational capacity of some non-EU AIFMs, and it will also create new opportunities for those seeking wider access to new European investors.

Individual member states are free to allow for private placements and to determine the extent of their rules. Some are expected to be restrictive (e.g. Germany and Italy) while others will be permissive (e.g. the UK). Member states that do not permit marketing by private placement will implement new regulatory filing, reporting and disclosure requirements.

EU cross-border marketing post-AIFMD will be a challenging proposition due to regulatory differences and marketing uncertainties. However, non-EU AIFMs that are able to obtain a passport may gain a competitive marketing advantage.

Becoming a non-EU Alternative Investment Fund Manager (AIFM)

An offshore manager can obtain an EEA passport for marketing and managing offshore funds between now and July 22, 2015. The offshore manager’s local regulator will need to have a co-operation agreement in place with the EU home jurisdiction, where the alternative investment fund (AIF) is established and where the fund will be marketed. In more complex situations, consultation between multi-jurisdictional regulators may be needed. This will enable the EU home regulator to ensure that the offshore manager complies with the directive, including depositary requirements and tax information sharing.

Important points for offshore managers to consider include, the timing and cost of registration, unforeseen multi-jurisdictional requirements and additional infrastructure needs.

DMS AIFM platform for non-EU managers

AIFMD will affect non-EU managers engaged in the following activities:

Marketing funds in the EEA

Managing EEA funds

Sub-advising a fund managed by an EU Manager

Delegating to EU sub-adviser

DMS Offshore Investment Services Ltd. (DMS) is a gateway to Europe with offices in Ireland, London and Luxembourg. These jurisdictions have a long history as effective and efficient bases for investment managers working in Europe.

DMS offers comprehensive AIFMD compliant fund platforms – in Ireland2 and Luxembourg – which allow non-EU managers to gain passport rights and market funds in the EEA. This means that EU managers and non-EU managers would not need to wait for 3rd country recognition, multiple regulator approval and substance requirements (e.g. compliance, risk management, portfolio personnel, systems and procedures).

How it works

Our team of offshore investment specialists will analyze and propose the DMS platform that is tailored to the needs of managers. The manager will assume control of a designated self contained cell from a platform. As such, the DMS platform AIFM will then delegate the responsibilities of portfolio management to the manager.

The DMS AIFM platforms will provide an offshore fund with continuity and a smooth transition to reach full AIFMD compliance.

About DMS

DMS Offshore Investment Services (DMS) is the worldwide leader in fund governance. With the industry’s largest team of more than 80 full-time directors, associate directors, and associates, all utilizing forensic governance techniques and leveraging industry-leading proprietary technologies, DMS operates more fund directorships than anyone else in the world and is the standard against which all others are compared.

DMS serves all major offshore financial centres and represents leading investment funds with a combined AUM of over $314 billion, from the largest funds in the industry to ambitious startup funds.

1Source KNEIP

2Pending regulatory approval in Ireland

DMS Offshore

Investment Services

dms House

20 Genesis Close

P.O. Box 314

Grand Cayman KY1-1104

CAYMAN ISLANDS

www.dmsoffshore.com Copyright © 2013 DMS Organization, All rights reserved.