Increased Depositary Costs Under AIFMD to Outweigh the Benefits

60% of delegates polled at a funds industry event believe the increase of costs for depositaries posed by the new Alternative Investment Fund Managers Directive (AIFMD) will be significant and will outweigh the advantages.

Clearstream polled 150 delegates, representing investment fund distributors, fund managers, asset managers and transfer agents at its funds summit last week. Delegates discussed the future impact of regulatory changes and future industry developments in the asset management and money market industry.

On the alternative fund manager side, 56% of the delegates say AIFMD will significantly impact their operational, legal and/or governance model set-up.

47% of the delegates – representing investment fund distributors, fund managers, asset managers and transfer agents – expressed that, going forward, AIFs (Alternative Investment Funds) will be marketed with an EU passport.

Restrictive private placement regimes at national levels were the key reason for this anticipation. Another 47% of market experts expect the use of both distribution models (with and without an EU passport) in parallel until
2018 when private placement rules are abandoned.

Philippe Seyll, member of Executive Board and Head of Investment Funds
Services at Clearstream, said the discussions at the Summit clearly demonstrated that there is still a high level of uncertainty imposed by AIFMD in the industry.

“We are engaging with a broad cross-section of the fund industry including the distributors, transfer agents and depositary banks to help the market meet its increased obligations following AIFMD,” he said.