REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL assessing the application and the scope of Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers
Date: 2020-06-10
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: alternative investment, application of EU law, capital markets union, financial legislation, financial risk, financial supervision, investment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 10.6.2020  COM(2020) 232 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL assessing the application and the scope of Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers     
 
 
TABLE OF CONTENTS 

1.  

INTRODUCTION ..................................................................................................................... 3 

1.1   Background ............................................................................................................................ 3 

1.2 

Legal basis .............................................................................................................................. 3 

1.3  Methodology and consultation process ................................................................................ 4 

2. ASSESSING THE APPLICATION AND THE SCOPE OF THE AIFMD ................................. 5 

2.1 Impact on AIFs and AIFMs ....................................................................................................... 5 

2.2 Impact on investors ..................................................................................................................... 6 

2.3 Impact on monitoring and assessment of systemic risk ........................................................... 7 

2.4 Impact of rules on investment in private companies and in/or for the benefit of developing 
countries ............................................................................................................................................. 9 

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ABBREVIATIONS  

AIF 

AIFM   

AIFMD 

AuM 

CLO 

CMU   

CRD 

CSD  

Alternative Investment Fund 

Alternative Investment Fund Manager 

Directive on Alternative Investment Fund Managers 2011/61/EU 

Assets under management 

Collateralised loan obligation 

Capital Markets Union 

Capital Requirements Directive 

Central Securities Depositary 

DG FISMA 

Directorate-General  for  Financial  Stability,  Financial  Services  and 

ECB 

EGESC 

ELTIF 

ESMA  

ESRB   

EU 

Capital Markets Union 

European Central Bank 

Expert Group of the European Securities Committee 

European Long-Term Investment Fund 

European Securities and Markets Authority 

European Systemic Risk Board 

European Union 

EuVECA 

European Venture Capital Fund 

FSB 

IMSC   

IOSCO 

NAV 

NCA    

NPPR   

MiFID  

UCITS  

Financial Stability Board 

ESMA Investment Management Standing Committee 

International Organization of Securities Commissions  

Net asset value 

National Competent Authority 

National private placement regime 

Markets in Financial Instruments Directive 

Undertakings for the Collective Investment in Transferable Securities 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.  

INTRODUCTION  

1.1   Background  

The Alternative  Investment  Fund Managers Directive1  (AIFMD) was adopted following the 
global financial crisis, which exposed certain weaknesses in global financial markets and their 
regulatory regimes.2 As a result, G20 Leaders agreed on the need for greater regulation of the 
financial industry to minimise the risk and magnitude of future crises.3 This also encompassed 
the  alternative  investment  management  sector  requiring  more  coordinated  supervisory 
oversight  and  increased  investor  transparency.  To  support  the  G20  objectives,  the 
International  Organization  of  Securities  Commissions  (IOSCO)  issued  high-level  principles 
for hedge funds regulations to guide the development of international standards in this area.4 

Following the European Council’s5 endorsement of these international commitments, and in 
the  light  of  the  European  Parliament  report6,  the  European  Commission  (hereinafter  - 
‘Commission’)  issued  a  Proposal  for  a  regulatory  framework  governing  Alternative 
Investment Fund Managers (AIFM).7 The AIFMD was adopted on 8 June 2011. Following its 
transposition into the national legal systems the AIFMD entered into application on 22 July 
2013.8 

The  AIFMD  seeks  to  achieve  a  coherent  supervisory  approach  to  the  risks  of  the  financial 
system, to provide high-level investor protection and to facilitate EU AIF market integration.9 
AIFMs  are required to  take measures to  manage risks and  ensure the requisite transparency 
regarding the activities of their managed alternative investment funds (AIF) while being able 
to  manage  and  market  AIFs  to  professional  investors  across  the  Union  with  a  single 
authorisation.10  

1.2  Legal basis 

This  Report  is  prepared  in  accordance  with  Article  69  of  the  AIFMD.  The  Commission  is 
required  to  review  the  application  and  the  scope  of  the  AIFMD  with  an  emphasis  on  the 
experience acquired in applying the Directive. It is necessary to assess the Directive’s impact 
on investors, AIFs, AIFMs in the Union and in third countries in order to establish the degree 
to which the objectives pursued by the AIFMD have been achieved.  

1 Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment 
Funds Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and 
(EU) No 1095/2010, OJ L 174, 1.7.2011, pp. 1 - 73. (AIFMD) 
2  Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  Alternative  Investment  Fund 
Managers, 30.04.2009, COM (2009) 207 final.  
3  Declaration  of  the  Summit  on  Financial  Markets  and  the  World  Economy,  Washington  DC,  November  15, 
2008.  
4 Recital 89 of the AIFMD; IOSCO Final Report Hedge Funds Oversight, June 2009.  
5 Conclusions of the European Council of 16 September 2010.   
6  Report  of  the  European  Parliament  with  recommendations  to  the  Commission  on  hedge  funds  and  private 
equity (A6-0338/2008) ['Rasmussen' Report] and on the transparency of institutional investors (A6-0296-2008) 
['Lehne' Report]; Report of the High - Level Group on Financial Supervision in the EU, 25 February 2009, p. 25. 
7 Supra 2. 
8 The last Member State transposing the AIFMD completed this process by the end of 2015. 
9 Recitals 2 - 4 and 94 of the AIFMD.  
10 Article 32(1) of the AIFMD. 

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This report fulfils the mandate of the Commission to provide the European Parliament and the 
Council with an assessment of the functioning of the AIFMD. In addition, the report reviews 
the  leverage  calculation  methods  as  required  under  Article  6  of  the  Commission  Delegated 
Regulation (EU) No 231/2013 (AIFMR), which supplements the AIFMD.11 The Commission 
Staff Working Document (SWD(2020)110: Commission Staff Working Document Assessing 
the application and the scope of Directive 2011/61/EU of the European Parliament and of the 
Council  on  Alternative  Investment  Fund  Managers)  provides  further  information  on  the 
conclusions. An independent KPMG report was also published.12 

1.3  Methodology and consultation process 

The Commission tasked an external contractor – KPMG13 – to conduct a General Survey and 
evidence-based study to assess the impact of the AIFMD.14  

The empirical study covered 15 EU Member States.15 It assessed whether the specific rules of 
the AIFMD are effective, efficient, coherent and relevant, and if they supported EU measures 
to achieve the general, specific and operational objectives of the Directive.16 

In  this  report,  the  KPMG  findings  are  complemented  by  other  sources  of  information, 
including relevant data updates and information obtained through various work streams in the 
Commission,17  ESMA18  and  the  European  Systemic  Risk  Board  (ESRB).19  The  Commission’s 
interactions  with  the  stakeholders,  comprising  national  competent  authorities  (NCAs), 
industry  representatives  and  investor  protection  associations,  through  public  consultations, 

11 Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 
2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating 
conditions, depositaries, leverage, transparency and supervision, OJ L 83, 22.3.2013, pp. 1 - 95. 
12 Report on the Operation of the Alternative Investment Fund Managers Directive (AIFMD)  -  Directive 
2011/61/EU, retrieved from: 
[https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/190110-
aifmd-operation-report_en.pdf] (KPMG Report). 
13 KPMG Law Rechtsanwaltsgesellschaft mbH as lead firm, with the subcontractors KPMG AG 
Wirtschaftsprüfungsgesellschaft, Germany and KPMG LLP, United Kingdom supported by the European 
network of KPMG.  
14 The General Survey took the form of an online questionnaire and ran between 6 February 2018 and 29 March 
2018. When carrying out the survey, KPMG was guided by a list of aspects laid down in Article 69(1) of the 
AIFMD on which stakeholders were invited to share their experiences. 
15 Austria, Belgium, Cyprus, Czech Republic, Denmark, France, Germany, Hungary, Ireland, Italy, Luxembourg, 
Malta,  Netherlands,  Spain,  United  Kingdom.  This  represents  a  good  sample  of  Member  States  in  terms  of 
geography and their different market size for AIFs, AIFMs or investors.  
16 Supra 12. 
17 Responses to the Commission's Call for Evidence on the  EU Regulatory Framework  for Financial Services, 
responses  to  the  Commission's  Consultation  on  Cross-Border  Distribution  of  Funds  (UCITS,  AIF,  ELTIF, 
EuVECA and EuSEF) across the EU. 
18 ESMA's opinion to the European Parliament, Council and Commission and responses to the call for evidence 
on the functioning of the AIFMD EU passport and of the National Private Placement Regimes of ESMA on the 
functioning  of  the  AIFMD  passport,  30  July  2015,  ESMA/2015/1235;  ESMA  thematic  study  among  National 
Competent Authorities on notification frameworks and home-host responsibilities under UCITS and AIFMD, 7 
April 2017, ESMA34-43-340; ESMA’s opinion on asset segregation and custody services, 20 July 2017 ESMA 
34-45-27; ESMA Annual Statistical Report EU Alternative Investment Funds 2019, 21.01.2019, ESMA 50-165-
748.  (ESMA  Statistical  Report  2019)  and  ESMA  Annual  Statistical  Report  EU  Alternative  Investment  Funds 
2020, 10.01.2020, ESMA50-165-1032 (ESMA Statistical Report 2020).  
19 Recommendation of the European Systemic Risk Board of 7 December 2017 on liquidity and leverage risks in 
investment funds ESRB/2017/6, 2018/C 151/01. Letter of 3 February 2020 to DG FISMA from the ESRB on its 
considerations regarding the AIFMD.  

4 

 
 
   
 
 
 
                                                           
bilateral  and  multilateral  meetings  were  taken  into  account.  Academic  and  statistical 
publications  further  supported  the  preparation  of  this  report.  For  example,  ESMA’s  Annual 
Statistical  Reports  on  EU  AIFs  was  particularly  useful  in  describing  the  EU  AIF  market.20 
Individual examples of inefficiencies of particular Union rules were also taken into account. 

On  27  September  2019,  the  Commission  consulted  the  Expert  Group  of  the  European 
Securities  Committee  (EGESC)  representing  the  Member  States  to  receive  technical  and 
policy feedback on material issues pertaining to the application and the scope of the AIFMD. 
The  EGESC  members  were  invited  to  make  written  submissions  and  the  report  takes  into 
account the positions of the EGESC members.  

On 22 October 2019, the Commission presented the key elements of this Report to the ESMA 
Investment  Management  Standing  Committee  (IMSC)  and  sought  its  input  based  on  the 
supervisory experience of NCAs.  

2. ASSESSING THE APPLICATION AND THE SCOPE OF THE AIFMD  

The  AIFMD  is  a  significant  pillar  of  the  Capital  Markets  Union  (CMU)  facilitating  the 
improved  monitoring  of  risks  to  the  financial  system  and  the  cross-border  raising  of  capital 
for  investments  in  alternative  assets.  The  AIFMD  played  an  important  role  in  creating  an 
internal market for AIFs and reinforcing the regulatory and supervisory framework for AIFMs 
in  the  Union.  AIFMs  are  now  operating  with  greater  transparency  for  investors  and 
supervisors.  

2.1 Impact on AIFs and AIFMs 

The EU AIF market has been on a continuous growth path as measured by net assets of AIFs 
and AuM with a notable cross-border activity of AIFMs. Since the adoption of the AIFMD in 
2011, total net assets of AIFs more than doubled in size from € 2.3 trillion to € 5.9 trillion.21 
The cross-border distribution of AIFs almost doubled between June 2017 and October 2019 
rising from 3% to 5.8% of AIFs.22 In this respect, the AIFM passport is confirmed to be an 
important  factor.  A  majority  of  the  AIFMs,  public  authorities  and  institutional  investors 
responding to the General Survey reported that access to national markets had increased due 
to the AIFMD, although 34% also reported an increased time to market.23 

This  report  finds  that  the  efficacy  of  the  EU  AIFM  passport  is  impaired  by  national  gold-
plating, divergences in the national marketing rules24, varying interpretations of the AIFMD 
by national supervisors25 and its limited scope. Smaller AIFMs unable to comply with all the 
requirements of the AIFMD must forgo raising capital in other Member States or overcome 
significant barriers to market access. Moreover, the AIFM passport allows marketing only to 

20  ESMA  Annual  Statistical  Report  EU  Alternative  Investment  Funds  2019,  21.01.2019,  ESMA  50-165-748, 
(ESMA Statistical  Report 2019) and ESMA  Annual Statistical Report EU Alternative Investment Funds 2020, 
10.01.2020, ESMA50-165-1032, (ESMA Statistical Report 2020). 
21 EFAMA Fact Book 2019, p. 27. 
22 Morningstar, June 2017 and Morningstar, October 2019. 
23 Supra 12, p. 101. 
24 Supra 12, pp. 74 and 114. 
25 Commission staff working document Impact Assessment on cross-border distribution of collective investment 
funds, SWD(2018) 54 final, 12.3.2018, [https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2017-
3132069_en#pe-2018-1277]. 

5 

 
 
 
 
 
 
 
 
 
 
                                                           
professional  investors,  again  restricting  the  cross-border  activities  of  AIFMs  as  semi-
professional and retail investors can only be approached under varying (and often restrictive) 
national  rules.  AIF  distribution  is  subject  to  MiFID  II26  rules,  which  differentiate  between 
retail  and  professional  investors,  therefore,  any  change  to  the  definitions  of  the  types  of 
investors  in  the  AIFMD  needs  to  take  into  account  the  interaction  of  the  AIFMD  with  the 
relevant provisions of MiFID II.   

AIFs  are  offered  to  retail  investors  by  banks  and  insurance  companies.  These  financial 
intermediaries  actively  promote  mainly  in-house  funds,  instead  of  also  offering  a  broader 
range  of  third  party  AIFs.27  However,  the  situation  is  changing  with  an  expanding  market 
share  of  on-line  platforms.  CMU  related  work  streams  in  the  Commission  are  focusing  on 
improving  the  distribution  of  investment  products  in  the  Union  and  reviewing  disclosure 
requirements. The outcome of those work streams will also impact AIFs and AIFMs based in 
third  countries,  which  at  present  may  only  access  investors  in  individual  Member  States  on 
the basis of national laws set out in National Private Placement Regimes (NPPRs).  

The  role  of  NPPRs  is  acknowledged  by  stakeholders  as  an  important  factor  in  market 
development  given  the  absence  of  the  activation  of  the  AIFM  passport  for  third  country 
entities.  As  a  result,  investors  in  the  Member  States  with  such  regimes  have  been  able  to 
access  global  markets  for  financial  services  and  diversify  their  investment  allocations. 
However,  NPPRs  differ  among  Member  States  and,  more  importantly,  require  AIFMs  to 
implement only a very limited number of the AIFMD requirements. This creates an un-level 
playing  field  between  EU  and  non-EU  AIFMs.  Some  Member  States  have  closed  market 
access  for  third  country  entities  entirely.  Some  Member  States  have  suggested  further 
harmonising the NPPRs, whereas others consider that activating the AIFMD passport for third 
country entities, followed by a phasing-out of NPPRs, would be a better solution to this issue.  

The Commission did not assess the functioning of the AIFMD third country passport as it has 
not yet been activated and there is no market information to draw on.  

2.2 Impact on investors  

Based on the detailed assessment in the Staff Working Document, the depositary regime, rules 
on  conflicts  of  interest,  disclosure  and  transparency  requirements  serve  to  protect  investor 
interests, which builds investor confidence in  financial markets.  Market  figures demonstrate 
increased  sales  of  AIFs  with  greater  participation  of  retail  investors  in  several  Member 
States.28 Cross-border activities have the potential to grow further given the recently adopted 
rules in the context of the CMU.29 

26 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial 
instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, OJ L 173, 12.6.2014, pp. 349–496. 
27 Study on the distribution systems of retail investment products across the European Union, April 2018, p. 17, 
retrieved from: [https://ec.europa.eu/info/sites/info/files/180425-retail-investment-products-distribution-
systems_en.pdf]. 
28 Supra 12, p. 257. 
29  Directive  (EU)  2019/1160  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  amending 
Directives  2009/65/EC  and  2011/61/EU  with  regard  to  cross-border  distribution  of  collective  investment 
undertakings, OJ L 188, 12.7.2019, p. 106–115 and Regulation (EU) 2019/1156 of the European Parliament and 
of the Council of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings and 
amending Regulations (EU) No 345/2013, (EU) No 346/2013 and (EU) No 1286/2014, OJ L 188, 12.7.2019, pp. 
55 - 66. 

6 

 
 
 
 
 
 
 
 
 
 
                                                           
A dedicated regime regulating functions and liability of depositaries proved to be an effective 
measure  for  enhancing  investor  protection.30  It  is  functioning  well,  even  though  targeted 
clarifications  may  be  necessary  to  address  situations  where  AIFMs  use  tri-party  collateral 
management or when central securities depositories (CSDs) act as custodians.  

More  significantly,  the  lack  of  a  depositary  passport  is  at  odds  with  the  spirit  of  the  single 
market. Because of the limited choice of service providers in smaller markets, there are also 
fears  of  concentration  risk  where  a  single  depositary  could  hold  the  assets  of  all  AIFs 
established in a Member State.  

As  regards  valuation  rules,  which  are  necessary  for  establishing  each  investor’s  share  in  a 
given  AIF  and  for  monitoring  the  AIF’s  performance,  the  AIFMD  brought  some  discipline 
and  structure  to  the  AIF  asset  valuation  process.31  There  may  be,  however,  issues  with  the 
binary nature of the valuation rules, whereby stakeholders understand that a combined use of 
internal and external valuers is excluded, as well as uncertainty around the liability of external 
valuers, which determined under the national laws. However, there was insufficient evidence 
to suggest which disclosure provisions of the AIFMD should be amended.   

Whilst entailing certain  costs for the industry, the AIFMD rules on disclosures  have largely 
achieved  the  objective  of  enabling  investors  to  make  informed  investment  decisions.32 
Requiring  disclosure  of  conflicts  of  interest  is  particularly  appreciated  by  investors  in 
alternative  assets  as  this  is  one  of  their  greatest  concerns.33  The  analysis  indicates  that  the 
AIFMD increased transparency regarding the offered products and services.34 However, it did 
not  identify  which  elements  of  the  disclosure  requirements  could  be  superfluous  given  that 
some professional investors request other information to that prescribed by the AIFMD.  

2.3 Impact on monitoring and assessment of systemic risk 

To monitor and mitigate macro risks that stem from the activities of AIFMs it is necessary to 
identify the relevant entities to ensure that they are meeting the basic requirements to manage 
professionally and responsibly their collective investments for the benefit of investors. There 
was  no  evidence  found  to  suggest  that  the  AIFMD  thresholds  of  assets  under  management 
(AuM),  above  which  the  activities  of  AIFMs  may  pose  significant  systemic  risk,  should  be 
adjusted.  

Stakeholders  find  the  tool-kit  for  financial  stability  purposes  available  to  NCAs  under  the 
AIFMD,  including  the  possibility  to  impose  leverage  limits  on  an  AIFM35  or  suspend 
redemptions in the interest of the public, useful. The ESRB recommends further enhancement 
and  harmonisation  of  those  measures.36  This  includes  a  recommendation  to  clarify  the 
respective roles of NCAs and their cooperation in the cases where suspension of redemptions 
have cross-border implications.37 When deciding if an intervention in the financial markets is 

30 Supra 12, p. 94. 
31 Supra 12, pp. 183-184. 
32 Supra 12, p. 77. 
33  Alts  Transparency:  Finding 
landing/cis/2017/alt-transparency.pdf]. 
34 Supra 12, p. 210. 
35 Article 25 of the AIFMD. 
36 Supra 19. 
37 As provided in Article 46 of the AIFMD. 

the  Right  Balance  [https://www.northerntrust.com/documents/campaign-

7 

 
 
 
 
 
 
 
 
                                                           
necessary, NCAs should be able to assess trends in the AIF industry and to monitor threats to 
financial stability considering the markets in which AIFs are trading. This is the reason for the 
AIFMD supervisory reporting requirements.38  

These  supervisory  reporting  requirements  are  confirmed  to  be  necessary  for  supervisors  to 
monitor risks  to  the financial system across sectors  and borders. However, a closer analysis 
points  to  the  need  to  consider  their  streamlining,  while  being  mindful  of  the  sunk  costs 
already  incurred  by  the  compliant  AIFMs.  There  are  also  overlaps  with  other  Union  laws, 
such as reporting to  the ECB for statistical  purposes, which could  possibly support the case 
for adjusting the current reporting template under the AIFMR.  

An  observable  trend  of  expanding  non-bank  lending  raises  financial  stability  concerns.39 
Some granular information on certain asset classes, such as leveraged loans and collateralised 
loan obligations (CLOs), as well as the information on indirect  linkages between banks and 
non-banks  is  currently  missing  but  is  relevant  for  macro-prudential  oversight.  Several 
stakeholders  have  asked  the  Commission  to  reassess  the  case  for  setting  common  standards 
for loan-originating AIFs.40  

Regarding leverage calculation methods, in principle, the gross and commitment methods as 
currently  provided  for  in  the  AIFMR  are  judged  to  be  appropriate  by  many  stakeholders.41 
Nevertheless, some adjustments may be called for by the conclusion of the Financial Stability 
Board’s (FSB) and IOSCO42 work in this area, which is focused on data reporting, as well as 
recommendations of the ESRB for improved measures to assess macro-prudential risks.43  

Monitoring of systemic risk and supervision of the AIF sector requires effective supervisory 
cooperation.  The  AIFMD  lays  down  rules  on  the  NCAs’  competences  and  their  interaction 
with ESMA playing an important role.  While the AIFMD provides the necessary framework 
for NCAs to cooperate, the efficacy of the rules has not yet been tested.  

ESMA,  on  the  other  hand,  is  playing  a  central  role  in  forging  greater  convergence  of  the 
AIFMD standards in the internal market by coordinating the NCA’s positions. Harmonisation 
of forms and processes and central management of databases by ESMA could further enhance 
convergence  in  implementing  and  applying  the  AIFMD.  As  explained  in  the  detailed 
assessment  in  the  Staff  Working  Document,  issuing  guidelines  has  proven  to  be  another 
useful  tool  in  achieving  uniform  implementation  and  application  of  the  AIFMD  across  the 
Union. For example ESMA guidelines on the AIFMD rules on AIMF remuneration.44  

38 Annex IV of the AIFMR.  
39 The role of non-bank financial institutions in the leveraged loan and CLO markets has increased. See FSB, 
Vulnerabilities associated with leveraged loans and collateralised loan obligations (CLOs), PLEN/2019/91-REV, 
22 November 2019.   
40 Expert Group of the European Securities Committee (EGESC) meeting on 27 September 2019. 
41 Supra 12, pp. 171-172. See section 2 of Chapter II of the AIFMR.  
42 FSB Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities,   
12 January 2017; IOSCO Final Report on Recommendations for Liquidity Risk Management for Collective 
Investment Schemes of February 2018; IOSCO Final Report on Recommendations for Liquidity Risk 
Management for Collective Investment Schemes of February 2018. 
43 Supra 19. 
44 ESMA Guidelines on sound remuneration policies under the AIFMD, 03 July 2013, ESMA/2013/232. 

8 

 
 
 
 
 
 
 
 
                                                           
Remuneration  rules  were  introduced  in  the  AIFMD  to  promote  effective  and  sound  risk 
management by aligning pay incentives with sustainable performance.45 A reported shift from 
variable  towards  fixed  remuneration46  seems  to  have  introduced  greater  risk-aversion  in  the 
collective alternative investment management sector and increased overall awareness of good 
remuneration  systems.47  Despite  this  trend,  some  stakeholders  have  called  for  aligning  the 
AIFMD rules on remuneration with the similar regimes provided in other sectorial legislation 
such as the recently changed Capital Requirements Directive (CRD).48 The latter establishes 
de  minimis  institutions  and  amounts  of  remuneration  that  may  be  exempt  from  deferring 
variable payment.  

2.4 Impact of rules on investment in private companies and in/or for the benefit 
of developing countries 

The  AIFMD  rules  on  supervisory  reporting,  depositary,  risk  management  and  remuneration 
do  not  explicitly  take  into  account  all  of  the  specificities  of  managing  private  equity 
investments.  Transparency  requirements  when  a  private  equity  fund  acquires  controlling 
stakes  in  private  companies  and  the  provisions  against  asset-stripping  are  not  overtly 
burdensome but it was not possible to establish their added value due to the lack of available 
data.  

Private  equity  fund  managers,  which  for  their  managed  portfolio  size  do  not  adhere  to  the 
regulatory parameters of the AIFMD or of the EuVECA Regulation49, encounter significant 
barriers to marketing their funds in other Member States.50 Consequently, some argue that the 
AIFMD  could  be  amended  to  better  accommodate  the  private  equity  sector  by  removing 
unnecessary charges and looking for more effective ways to protect non-listed companies or 
issuers. 

There is insufficient evidence to determine the impact of the AIFMD on investing in or for the 
benefit of developing countries. However, the AIFMD does not appear to impose regulatory 
restrictions that would hinder such investments.  

Following  the  submission  of  this  report  to  the  EU  co-legislators,  the  AIFMD  requires  the 
Commission, if deemed appropriate, to  put  forward proposals,  including amendments  to  the 
AIFMD. The Commission is still assessing the need for further proposals in this domain.  

It  is  also  important  to  note  other  legislative  steps  the  EU  has  recently  taken  in  the  asset 
management  sector.  The  package  on  Cross-Border  Fund  Distribution  of  Investment  Funds 
was  adopted  inter  alia  to  increase  transparency  in  relation  to  regulatory  fees  charged  by 
NCAs for processing AIF notifications and in relation to national marketing rules.51 The asset 

45 There is some evidence supporting their effectiveness in nudging targeted agents towards a risk conscious 
behaviour. 
46 Supra 12, pp. 188 - 189. 
47 Supra 12, p. 192. 
48 Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019 amending Directive 
2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, 
remuneration, supervisory measures and powers and capital conservation measures, OJ L 150, 7.6.2019, pp. 253 
- 295. 
49 Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European 
venture capital funds. 
50 Bilateral meetings with stakeholders.  
51 Supra 29.  

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segregation  requirements  where  custody  of  assets  is  delegated  to  a  third  party  were 
rationalised by the recent amendments to the Commission Delegated Regulation 231/2013.52 
Amendments  to  the  CRD  provide  that  AIFMs  belonging  to  the  same  corporate  group  or 
conglomerate will have to apply the AIFMD rules on remuneration thus avoiding becoming 
subject  to  multiple  sets  of  rules  regulating  different  financial  intermediaries.53  The  EU 
regulation  on  sustainability-related  disclosures  in  the  financial  services  sector  will  ensure 
coherence  across  different  EU  regulatory  frameworks.54  The  recently  changed  European 
Venture  Capital  Fund  Regulation  (EuVECA)  opened  up  the  use  of  the  designations 
‘EuVECA’ to  managers  of collective investment  undertakings authorised  under the AIFMD 
and expanded investment parameters.55  

However, other issues raised in this report could possibly require further action at Union level 
to deepen the EU market for AIFs  and respond to technological developments ensuring that 
the AIFMD legal framework is fit for purpose.  

52  Commission  Delegated  Regulation  2018/1618  of  12  July  2018  amending  Delegated  Regulation  (EU)  No 
231/2013 as regards safe-keeping duties of depositaries, OJ L 271, 30.10.2018, pp. 1 – 5. 
53 Supra 48. 
54 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on 
sustainability‐ related disclosures in the financial services sector, OJ L 317, 9.12.2019, pp. 1–16. 
55 Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending 
Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on 
European social entrepreneurship funds, OJ L 293, 10.11.2017, pp. 1–18. 

10