AIFMD, AN ALTERNATIVE TO MIFID II
MiFID II has exemptions. Article 2.(1)(i) of MiFID II states that the directive shall not apply to ‘collective investment undertakings and pension funds whether coordinated at Union level or not and the depositaries and managers of such undertakings.’ The reason that this exemption applies is because the management of collective investment schemes falls under AIFMD (the EU directive for alternative investment fund managers). As such, MiFID managers have a choice. They can continue to undertake their investment business activity as a MiFID manager in accordance with MiFID II, or they can convert their business into a collective investment undertaking and fall within the AIFMD rules and avail themselves of MiFID II. AIFMD also has exemptions; proprietary traders and family offices are exempt from AIFMD on the basis that they invest the private wealth of investors without raising external capital; and ‘small’ managers, those that manage assets of less than €100 million open-ended and €500 million closed-ended, are also exempt from AIFMD save for the requirement of annual reporting based on 31 December reporting date.
It is appreciated that availing oneself of MiFID II to fall within AIFMD may not be practical in all instances and the solution to become an AIFMD fund manager may not suit all managers. However, if proprietary trader and/or family office manager finds themselves in the situation that they are required to comply with MiFID II, they may wish to consider operating within AIFMD, making use of the available AIFMD exemptions. Also, a manager with a client and/or clients that have burdensome transaction reporting, may wish to operate within AIFMD as a small exempt manager to be outside of scope of MiFID II (in order to avail themselves of the respective transaction reporting).
There are options available to MiFID managers. Grant Thornton Fund Administration Limited (Gibraltar) can establish collective investment schemes and, thereafter, administer them for managers that chose AIFMD as an alternative to MiFID II.
27 | ADMISI - The Ghost In The Machine | November/December 2017
MIFID II IN THE PRESS
On 3 January 2018, MiFID II will come into force. MiFID II is not popular. The Evening Standard captured the MiFID II mood very well in an article during April 2016 stating ‘Winter is coming for small-cap stockbrokers… It is not the thought of a potential Brexit that keeps them awake at night. The monster giving the players on London’s junior stock exchange nightmares is MiFID II.’
Adrian Hogg E:
adrian.hogg@gi.gt.com T: 003 502 004 5502
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40
