Guernsey's AIFMD Regime - Rules, Forms, Guidance & FAQs

The Executive Order nr.821 of 29 June 2013 applies to the marketing of third country AIFs by fund managers established in a third country. The executive order is currently available only in Danish but an authorised English translation will be available soon.

A fund manager that intends to market an AIF established in a third country to professional investors in Denmark is required to send a Notification Letter (application form) to the Danish FSA together with relevant information as required in article 3 of the executive order. The application processing time can take up to 3 months after the complete application file has been submitted to the Danish FSA. The Notification Letter (application form) referred to above is available on the Danish FSA’s website (see link to left).

Question 6) of the Notification Letter (application form) requires a statement from the supervisory authoritites of the non-EU AIF to the effect that the home country is prepared to grant similar Danish AIFs access to market their units ore shares in the country in question. An overarching statement dated 31/10/13 has been issued to the Danish FSA stating that the Commission is willing to permit the promotion of the Danish Alternative Investment Funds into the Bailiwick of Guernsey through an entity licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended. Reference to this statement may be made in response to question 6) in any application to the Danish FSA.

Marketing to retail investors in Denmark of AIFs is currently not permitted for fund managers established in a third country. Neither is it possible for third country managers to apply for authorisation to market its funds to retail investors.

You should refer in particular to article D. 214-32. For a non-EU AIF to be marketed in France by a non-EU AIFM (to professional investors), the following preconditions should be met :

- a prior notification to the AMF for each AIF the marketing of which is contemplated in France ;
- the non-EU AIFM must comply with all legal and regulatory provisions normally applying to an authorized AIFM. An entity must be appointed to carry out the depositary duties of cash monitoring, safe keeping of assets and oversight in respect of that AIF (identity of that entity must be provided to the AMF) ;
- a cooperation agreement (MOU) must be in place between the AMF and the supervisory authority of the country where the non-EU AIFM is established and, if applicable, of the country where the non-EU AIF is established (note : in the case of Guernsey, the MOU signed by both our authorities last June will serve the purpose);
- the third country in which the non-EU AIF or the non-EU AIFM is established is not listed as a Non-Cooperative Country and Territory by Financial Action Task Force;
- when the non-EU AIF is open-ended, the AIFM must obtain a prior authorization from the AMF permitting the marketing of its units or shares in France. The AMF will grant such an authorization only if the non-EU AIF is subject to investor protection and transparency rules that are equivalent to the French rules.

AMF are currently preparing a guidance note which they plan to issue in the coming weeks.

On 22 July, the Act Implementing the Alternative Investment Fund Managers (AIFM) Directive entered into force. By virtue of the Act Implementing the AIFM Directive, the Investment Act was repealed and replaced by the Investment Code (Kapitalanlagegesetzbuch –KAGB).

Attached are translations of the most relevant passages of the Investment Code and of a guidance notice on marketing third-country AIF in Germany. However, please note, that these are only convenience translations. In case of deviation, the German version shall prevail.

Excerpt of Investment Code

Guidance Note

Marketing of non-EU AIFs managed by non-EU AIFM to professional investors in Ireland is subject to Regulation 43 of the AIFM Regulations, guidance on this process will shortly be published on the Central Bank of Ireland website.

Marketing of AIFs to retain investors in Ireland is subject to Regulation 44 of the AIFM Regulations and the Central Bank AIF Rulebook (Chapter 1, Part III) sets out the requirements which need to be satisfied in order to market into Ireland. The policy which was applied to marketing AIFs to retail investors pre-AIFMD in Ireland is currently still in force for the time being.

The Dutch Government has stated that Guernsey will remain designated as an equivalent country until 2018.

A notification form for managers of alternative investment funds, has recently been released by the AFM. The annex to the form makes the following statement:

"The following document needs to be submitted with this notification form:

An attestation of the competent authority of the AIFM in which it confirms that it is able to effectively comply with the cooperation agreement between that competent authority and the AFM as set out in article 1:13b section 1 and 2 Wft in respect of the specific AIFM identified under question 1.

This attestation does not need to have a specific format. Any form of attestation is acceptable as long as its content satisfies the AFM and DNB that the notified entity is a ‘covered entity’ under the cooperation agreement and that the competent authority of the AIFM is consequently able to effectively impose the agreed terms under the cooperation agreements in relation to the particular non-EU AIFM which is notified pursuant to this notification form."

September 2014 Update

The AFM has accepted an overarching statement from the Commission, therefore, individual attestations will no longer be required, however, the AFM requires confirmation that Guernsey AIFMs are appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The AFM has confirmed that a screen print from https://www.gfsc.gg/commission/regulated-entities would satisfy this requirement.

Please note the above arrangement is specific to Guernsey AIFMs and is not an arrangement that has been extended by the AFM to all non-EEA AIFMs.

AIFMD has not yet been transposed in Romania. Until this national legislation is in place fund managers from third countries may perform marketing activities in Romania under the current applicable legal framework. Article 176 of Regulation no. 15/2004 covers the authorisation and functioning of investment management firms, collective investment undertaking and depositories. Article 10 of Executive Order no. 9/2010 covers the marketing activities of collective investment schemes. Attached are English versions of the relevant provisions. However, please note, that these are only convenience translations. In case of deviation, the Romanian version shall prevail.

Slovakia has transposed AIFMD into Slovak legislation under Act No. 206/2013 amending Act No. 203/2011 on Collective Investment Schemes.

An AIFM which intends marketing in the territory of the Slovak Republic is obligied to notify the National Bank of Slovakia of its intention. The notification should be in writing, in language common in the sphere of the international finance and should contain information listed in the Annex III of the AIFMD Directive as well as documentation which proves the fulfilment of the requirements listed in Article 42(1)(a) of the AIFMD Directive.

National Bank of Slovakia shall review the completeness of the notification and documentation sent by the non-EU AIFM and in the period of 20 working days shall notify the non-EU AIFM whether it may commence the marketing of the units or shares of the relevant AIFs listed in the notification. National bank of Slovakia may prohibit such marketing only if the requirements listed in Article 42 (1) of the AIFMD Directive are not complied with or the management of the AIFs is not compliant with the requirements of the AIFMD Directive. The non-EU AIFM may commence the marketing of the units or shares of the relevant AIFs only after receiving the notification of the National Bank of Slovakia confirming that the marketing may commence. Marketing to retail investors requires an additional licence issued by the National Bank of Slovakia.

Firms based in non-EEA (3rd country) jurisdictions wishing to market AIFs in the UK will be required to comply with the FCA’s National Private Placement Regime as well as the FCA’s financial promotion rules. The Treasury has put in place transitional arrangements for the regime, for firms to be able to continue to carry on non-EEA activities on the basis of existing requirements.

EEA firms or full scope UK AIFMs managing non-EEA AIFs and wishing to use the National Private Placement Regime can find more information on the FCA’s NPPR page.

To be able to market under NPPR, the AIFM needs to satisfy a number of conditions, as detailed in regulations 57, 58 and 59 of the UK Alternative Investment Fund Managers Regulations 2013 (the Treasury’s Regulations). For example, for full-scope AIFMs, there needs to be a memorandum of understanding on supervisory co-operation arrangements (MoU) between the UK (or EEA member state in the case of an EEA AIFM) and each relevant non-EEA competent authority. For further details of the current status of MoUs see the FCA’s latest news . Another condition for non-EEA AIFMs is that the AIFM is the person responsible for complying with the implementing provisions relating to the marketing of the AIF.