Fund Associations Slam ESMA AIFMD Ruling

The trade body for the global hedge fund industry has said Europe’s financial regulator must act faster in extending the pan-European marketing passport to Hong Kong, Singapore and U.S. funds.

The Alternative Investment Management Association (AIMA) urged the European Securities and Markets Authority (ESMA) to complete the process of extending the passport to more non-EU countries such as Canada, the Cayman Islands and Australia, as soon as possible.

It also stated ESMA should work faster in resolving the “open-ended nature of the process relating to the U.S.”.

Last week ESMA ruled the AIFMD passport will be extended to hedge funds based in Guernsey, Jersey and Switzerland.

“While we would have wished ESMA to adopt a more streamlined and speedier assessment of all important jurisdictions as there is no need for an equivalence assessment in the AIFMD, we welcome the clarity on which jurisdictions are to be assessed in the coming months,” says Jack Inglis, CEO, AIMA.

In addition, the Investment Company Institute (ICI), which represents the U.S. mutual funds industry, said ESMA’s advice to the European Commission on the AIFMD passport failed to identify the difference between the sale of private funds and mutual funds.

“ESMA’s advice inappropriately confuses the regulation of mutual funds with the regulation of funds sold to professional investors in the United States,” the ICI states.

“The issue before ESMA is the sale of funds to professional investors across the European Union. Currently in the United States, EU managers can readily sell funds to professional investors on the same terms as U.S. managers, and across the entire U.S. marketplace. Unfortunately, the impact of ESMA’s advice would be to discriminate against U.S. managers by denying them comparable access to the entire EU marketplace.”