The European Securities and Markets Authority (ESMA) has said the Alternative Investment Fund Managers Directive (AIFMD) review is a chance to consider “greater harmonisation” of the UCITS and AIFMD regimes.
In a letter to the European Commission setting out areas to consider during the upcoming AIFMD review, ESMA explained in some cases, the newer AIFMD provisions are “more granular or specific compared to the UCITS requirements, although there might not be any objective justification for such differences”.
ESMA used the example of different levels of granularity with respect to risk management and liquidity management requirements.
The letter stated: “The European Commission should consider aligning the frameworks
where appropriate, in particular as applying different requirements to management companies
which manage both UCITS and AIFs creates additional burdens for the firms concerned and
divergences in supervisory/regulatory outcomes.”
Other areas that ESMA put forward for consideration include delegation and substance; liquidity management tools; leverage; the AIFMD reporting regime and data use; and the harmonisation of supervision of cross-border entities.
ESMA said the AIFMD review provides the EU with “an opportunity to apply lessons learned”.
It also encouraged the commission to support the areas identified in the letter “in order to improve the effectiveness and soundness of the AIFMD”.
