The Alternative Investment Management Association has expressed concerns with the European Securities and Markets Authoritys consultation paper on how the Alternative Investment Fund Managers Directive (AIFMD) should be implemented.
AIMA said many of ESMAs draft proposals were measured, but several major areas of concern remained, including proposals relating to depositaries, leverage, valuation, transparency and liquidity management.
We wish to congratulate ESMA on a job well done in difficult circumstances, and to a tight timetable, AIMA CEO Andrew Baker says. We hope they finalize the advice in the independent and evidence-based spirit in which they produced this consultation document.
However, there remain a number of areas that continue to cause us difficulty, most notably the proposals relating to depositaries. While some of the proposals made by ESMA in this area are undoubtedly welcome, we are concerned that some of the options on the table are so extreme that the eventual regime could end up being not only wholly unworkable but also potentially dangerous by greatly increasing systemic risk. We would urge ESMA to look again at these proposals and opt for the more practicable options they put forward.
An AIMA study into the potential impact on depositaries found that the total cost to hedge funds of implementing the options proposed in the paper could exceed $6 billion, which would inevitably be passed on to hedge fund investors such as pension funds, charities, universities and insurers, AIMA says.
(CM)