EC responds to ESMA passporting advice
22 January 2016 Paris
Image: Shutterstock
The European Commission has responded to the European Securities and Markets Authority (ESMA) advice on the application of the Alternative Investment Fund Managers Directive (AIFMD) passport to non-EU alternative investment funds and their managers.
In the letter, the commission asked ESMA to provide a more detailed assessment of the capacity of supervisory authorities in third countries, and of their track records in ensuring effective enforcement.
It also suggested that ESMA provides a preliminary assessment of the expected inflow of funds in to the EU from relevant third countries, by size and type, in order to assess any potential market disruption and competition effects of granting the passport.
The commission also asked ESMA to complete its assessment of whether to extend the European passport to the US, Hong Kong, Singapore, Japan, Canada, the Isle of Man, the Cayman Islands, Bermuda and Australia by the end of June 2016.
The letter suggested that this has been delayed because of a delay in transposing the directive in some EU member states, making it difficult to asses how the directive was working in July 2015, the time of the initial assessment deadline.
The commission agreed with ESMA’s advice that assessment of third countries should be done country-by-country, as outcomes will differ depending on the regulatory and supervisory networks in each country.
Also, restraint of resources means that ESMA has had to deliver its advice to different countries in waves. The European Commission suggested that it would make a decision on the passporting regime generally once more countries have been assessed.
Finally, the letter addressed ESMA’s opinion on the national private placement regimes (NPPRs) used in some non-EU countries.
It agreed with ESMA’s suggestion that it should produce another opinion on the functioning of the EU passport and NPPRs once AIFMD has been fully implemented in the EU and the industry has more experience in the functioning of the framework.
The commission suggested that an updated opinion on this from ESMA would be helpful for the planned review of the directive, which is scheduled for 2017.
In the letter, the commission asked ESMA to provide a more detailed assessment of the capacity of supervisory authorities in third countries, and of their track records in ensuring effective enforcement.
It also suggested that ESMA provides a preliminary assessment of the expected inflow of funds in to the EU from relevant third countries, by size and type, in order to assess any potential market disruption and competition effects of granting the passport.
The commission also asked ESMA to complete its assessment of whether to extend the European passport to the US, Hong Kong, Singapore, Japan, Canada, the Isle of Man, the Cayman Islands, Bermuda and Australia by the end of June 2016.
The letter suggested that this has been delayed because of a delay in transposing the directive in some EU member states, making it difficult to asses how the directive was working in July 2015, the time of the initial assessment deadline.
The commission agreed with ESMA’s advice that assessment of third countries should be done country-by-country, as outcomes will differ depending on the regulatory and supervisory networks in each country.
Also, restraint of resources means that ESMA has had to deliver its advice to different countries in waves. The European Commission suggested that it would make a decision on the passporting regime generally once more countries have been assessed.
Finally, the letter addressed ESMA’s opinion on the national private placement regimes (NPPRs) used in some non-EU countries.
It agreed with ESMA’s suggestion that it should produce another opinion on the functioning of the EU passport and NPPRs once AIFMD has been fully implemented in the EU and the industry has more experience in the functioning of the framework.
The commission suggested that an updated opinion on this from ESMA would be helpful for the planned review of the directive, which is scheduled for 2017.
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