Abstract
European legislation on investment funds does not provide for a single coherent third country regime. The UCITS Directive 1985, as one of the earliest directives aiming at financial product harmonisation within the European Union, never contained a third country regime. By contrast, the much younger AIFMD contains an elaborate, staged third country regime: while the first stage is essentially based on access under national private placement regimes subject to certain harmonised minimum requirements, the second stage is based on a ‘third country passport’ obliging third country actors to become fully licensed in an EU member state of reference. Contrary to expectations at the outset of AIFMD, it is questionable whether and when the second phase will be implemented. In the light of the rather cumbersome third country access regime for non-EU fund products and asset managers, delegation of portfolio management by EU-regulated management companies to third country asset managers is an important access path for asset management services into the European Union.
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Notes
Hereinafter, the terms ‘collective investment scheme’ and ‘investment fund’ are used interchangeably.
Council Directive 85/611/EC.
Art. 4(1) lit. a (ii) AIFMD.
This article focuses on the asset management aspects of the market for collective investment schemes. It does not address the market for services as custodian/depositary for investment funds which under the UCITS Directive is still characterised by the requirement of the depositary being domiciled in the home member state of the investment fund. With respect to EU AIFs, the same principle so far also applies under AIFMD. With respect to the debate on the introduction of a depositary passport, cf. Buttigieg (2020), p 581.
Directive (EU) 2019/1160.
ESMA (2021), p 17.
Art. 2(1) lit. e UCITS Directive.
Art. 2(1) lit. d UCITS Directive.
Art. 5(3) UCITS Directive.
Art. 13(1) UCITS Directive.
Cf. Klebeck and Eichhorn (2014), p 19.
See https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Auslegungsentscheidung/WA/ae_140116_vertrieb_ogaw_schweiz_wa.html (last accessed 22 January 2024).
See Section 4.4 below.
Deutscher Bundestag (2013), p 280.
Art. 4(1)(a)(ii) AIFMD.
Ceyssens and Tarde (2019), p 810; Recital 10 AIFMD .
Recital 10 AIFMD.
Recital 2 AIFMD.
Art. 43(1) AIFMD.
Art. 6(1) AIFMD. Certain exemptions apply under size thresholds and limitations to certain types of investors (‘small AIFM regime’).
Art. 37(1) AIFMD.
Both with respect to the non-EU AIFM and the non-EU AIF.
Cf. Section 4.3.2.
Art. 68(6) AIFMD.
Art. 66(4) AIFMD.
Regulation (EU) No. 448/2013.
Arts. 31-33 AIFMD, which specifically relate to EU AIFMs and their EU AIFs, do not apply. With respect to the exceptions under Art. 37(2) AIFMD, see Section 4.7 below.
Art. 37(6) AIFMD.
Cf. ESMA (2015). The advice provided by ESMA in July 2015 related to the United States, Guernsey, Jersey, Hong Kong, Switzerland and Singapore. In July 2016, ESMA extended its advice to Australia, Bermuda, Canada, Cayman Islands, Isle of Man and Japan.
ESMA (2015), p 20.
Ibid.
In the case of Switzerland this assessment was subject to enactment of pending legislation.
Final version available under: https://data.consilium.europa.eu/doc/document/PE-67-2023-INIT/en/pdf.
Art. 33 AIFMD.
Art. 20(1) lit. c AIFMD.
Cf., for example, the press release by the Luxembourg Commission de Surveillance de Secteur Financier dated 25 January 2019: https://www.cssf.lu/en/2019/01/brexit-delegation-of-investment-management-temporary-permissions-regimes/ (last accessed 22 January 2024).
European Commission (2021).
European Private Equity & Venture Capital Association (undated), p 3.
Art. 37(2) AIFMD; see also Schmies (2019), p 1549.
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The author wishes to thank Ref. iur. Elisaweta Rabovskaja for her research for this contribution.
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Schmies, C. Third Country Relations and the Equivalence Regime: Treatment of Collective Investment Schemes. Eur Bus Org Law Rev 25, 167–181 (2024). https://doi.org/10.1007/s40804-024-00313-w
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DOI: https://doi.org/10.1007/s40804-024-00313-w