Changes from report parliamentary committee draft to plenary report

Added‘(c) the third country where the non-EU AIFM or the non-EU AIF is established is not identified as a high-risk third country pursuant to Article 9(2) of Directive (EU) 2015/849 at the time the Member State allows the non-EU AIF to be marketed to professional investors in its territory.’;

Added(b) the following point (d) is added:

Added‘(d) the third country where the non-EU AIF or non-EU AIFM is established has signed an agreement with the Member State in which the units or shares of the non-EU AIF are intended to be marketed, which fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and ensures an effective exchange of information in tax matters, including any multilateral tax agreements, and that third country is not mentioned in Annex I to the relevant last updated version of the Council conclusions ▌on the revised EU list on non-cooperative jurisdictions for tax purposes applicable at the time the Member State allows the non-EU AIF to be marketed to professional investors in its territory.

AddedIf the third-country where the non-EU AIF is established is added to Annex I to the relevant last updated version of the Council conclusions on the revised EU list on non-cooperative jurisdictions for tax purposes after the time the Member State allows the non-EU AIF to be marketed to professional investors in its territory, closed-ended funds shall continue to be considered to meet that criterion for a period of two years.

AddedFor the purposes of this paragraph, a third country that has been continuously mentioned in Annex II to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes for a period of over three years shall be considered to be mentioned in Annex I to those conclusions.’;

Added(16a) in Article 43, the following paragraph (3a) is added:

Added‘3a. This Article shall not apply to AIFs constituted exclusively for the purpose of purchasing company shares and proposed to employees of these companies within the framework of employee savings schemes.’;

Added(17) in Article 46(2), point (j) is replaced by the following:

Added‘(j) in the interest of investors▌, in exceptional circumstances and after consulting the AIFM, and if there are reasonable and balanced investor protection or financial stability risks that necessitate this requirement, require AIFMs to activate or deactivate a liquidity management tool referred to in point 1 or 2 of Annex V▌,whichever is more suitable considering the type of open-ended AIF or group of open-ended AIFs concerned▌.’;

Added(18) Article 47 is amended as follows:

Added(a) paragraph 3 is replaced by the following:

Added‘3. All the information exchanged under this Directive between ESMA, the competent authorities, EBA, the European Supervisory Authority (European Insurance and Occupational Pensions Authority) established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council* and the ESRB shall be considered confidential, except:

Added(a) where ESMA or the competent authority or another authority or body concerned states at the time of communication that such information may be disclosed;

Added(b) where disclosure is necessary for legal proceedings;

Added(c) where the information disclosed is used in a summary or in an aggregate form in which individual financial market participants cannot be identified.

Added*Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48).’;

Added(b) in paragraph 4, the following point (d) is added:

Added‘(d) require non-EU AIFMs that are marketing in the Union AIFs that they manage or EU AIFMs managing non-EU AIFs to activate or deactivate a liquidity management tool referred to in point 1 or 2 of Annex V or selected by the AIFM, whichever is more suitable considering the type of open-ended AIF concerned and the investor protection or financial stability risks that necessitate this requirement.’;

Added(19) Article 50 is amended as follows:

Added(a) paragraph 5 is replaced by the following:

Added‘5. Where the competent authorities of one Member State have clear and demonstrable grounds to suspect that acts contrary to this Directive are being or have been carried out by an AIFM not subject to supervision of those competent authorities, or by an entity appointed as depositary by an AIFM, they shall notify ESMA and the competent authorities of the home and host Member States of the AIFM or those of the entity concerned thereof in as specific a manner as possible. The recipient authorities shall take appropriate action, shall inform ESMA and the notifying competent authorities of the outcome of that action and, to the extent possible, of significant interim developments. This paragraph shall be without prejudice to the competences of the notifying competent authority.’;

Added(b) the following paragraphs 5a to 5g are inserted:

Added‘5a.The competent authorities of the home Member State of an AIFM shall notify the competent authorities of the host Member State of the AIFM and ESMA ▌prior to exercising powers pursuant to Article 46(2), point (j), or Article 47(4), point (d). The competent authorities of the home Member State of the AIFM shall notify ESRB if there is any potential risk to the stability and integrity of the financial system.

Added5b. The competent authority of the host Member State of an AIFM may request the competent authority of the home Member State of the AIFM to exercise powers laid down in Article 46(2), point (j) or Article 47(4), point (d), specifying the reasons for the request and notifying ESMA and, in the case of any potential risk to the stability and integrity of the financial system, the ESRB thereof.

Added5c. Where the competent authority of the home Member State of the AIFM does not agree with the request referred to in paragraph 5b, it shall inform the competent authority of the host Member State of the AIFM, ESMA and, in case of any potential risk to the stability and integrity of the financial system, the ESRB thereof, stating its reasons.

Added5d. Based on the information received in accordance with paragraphs 5b and 5c, ESMA shall issue an opinion to the competent authorities of the home Member State of the AIFM on exercising powers laid down in Article 46(2), point (j) or Article 47(4), point (d). The opinion shall be communicated to the authority of the host Member State.

Added5e. Where the competent authority does not act in accordance or does not intend to comply with ESMA’s opinion referred to in paragraph 5d, it shall inform ESMA and the competent authority of the host Member State, stating its reasons for the non-compliance or intention. In the event of a serious threat to investor protection, a threat to the orderly functioning and integrity of financial markets or a risk to the stability of the whole or part of the financial system in the Union, and unless such publication is in conflict with the legitimate interest of the share or unit-holders or of the public, ESMA may publish the fact that a competent authority does not comply or intend to comply with its advice, together with ▌the reasons stated by the competent authority ▌for the non-compliance or intention. ESMA shall give the competent authorities advance notice about such publication.

Added5f. The competent authority of the host Member State of an AIFM may, where it has good reasons to suspect that acts contrary to this Directive are being or have been carried out by the AIFM, request the competent authority of the home Member State of the AIFM to exercise, without delay, powers laid down in Article 46(2), specifying the reasons for its request in as specific a manner as possible and notifying ESMA and, if there are potential risks to the stability and integrity of the financial system, the ESRB thereof.

AddedThe competent authority of the home Member State of the AIFM shall, without undue delay, inform the competent authority of the host Member State of the AIFM, ESMA and, if there are potential risks to stability and integrity of the financial system, the ESRB of the powers exercised and its findings.

Added5fa. Where a Member State has exercised the option provided for in Article 21(5a) and where the competent authorities of the home Member State of an AIF have reasonable grounds to suspect that acts contrary to this Directive are being or have been carried out by a depositary not subject to supervision of those competent authorities, such competent authorities shall without delay notify ESMA and the competent authorities of the depositary concerned thereof in a manner as specific as possible. The recipient authorities shall take appropriate action and inform ESMA and the notifying competent authorities of the outcome of that action. This paragraph shall be without prejudice to the competences of the notifying competent authorities.

Added5g. ESMA may request the competent authority to submit explanations to ESMA in a reasonable time frame in relation to specific cases, which raise a serious threat to ▌investor protection▌, threaten the orderly functioning and integrity of financial markets or pose risks to the ▌stability of the whole or part of the financial system in the Union.’;

Added(c) the following paragraph 7 is added:

Added‘7. ESMA shall develop draft regulatory technical standards indicating in which situations the competent authorities may exercise the powers set out in Article 46(2), point (j) and in which situations they may put forward the requests referred to in paragraphs 5b and 5f. When developing those standards, ESMA shall consider the potential implications of such supervisory intervention for reasonable and efficient investor protection and the financial stability in another Member State or in the Union. Those standards shall recognise that the primary responsibility for liquidity risk management remains with the AIFM and that intervention by the competent authorities is a last resort.

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

Added(20) ▌Article 61 is amended as follows:,

Added(a) paragraph 5 is deleted:

Added‘5.▌

Added(b) the following paragraph is added:

Added‘5a. AIFMs in so far as they manage AIFs that originate loans and that have been constituted before ... [date of entry into force of this amending Directive] may continue to manage such AIFs without complying with Article 16(2a) of this Directive until ... [5 years + date of entry into force of this amending Directive]. By way of derogation, loan-originating AIFs constituted before ... [date of entry into force of this amending Directive] and that do not raise additional capital after ... [5 years + date of entry into force of this amending Directive] shall be deemed to comply with the above-mentioned Articles’

Added(21) the following Article 69b is inserted:

Added‘ Article 69b

AddedReview

Added1. By [Please insert date = 60 months after the entry into force of this Directive] and following the peer reviews by ESMA referred to in Article 38a and reports produced by ESMA in accordance with Article 7(9), the Commission shall initiate a review of the functioning of the rules laid down in this Directive and the experience acquired in applying them. That review shall include an assessment of the following aspects:

Added(a) the impact on financial stability of the availability and activation of liquidity management tools by AIFMs;

Added(b) the effectiveness of the AIFM authorisation requirements in Articles 7 and 8 and delegation regime laid down in Article 20 of this Directive with regard to preventing the creation of letter-box entities in the Union;

Added(c) the appropriateness of the requirements applicable to AIFMs managing loan-originating AIFs laid down in Article 15;

Added(d) the effectiveness and the impact on financial stability of the depositary passport.

Added(da) the appropriateness of the requirements applicable to AIFMs managing AIFs on behalf of a third party as laid down in Article 14(2a).

Added1a. For the purposes of point (d) of paragraph 1, the Commission shall by ... [24 months after the entry into force of this amending Directive] carry out a comprehensive study on the potential benefits and risks of introducing an EU depositary passport.

Added2. By [Please insert date = 24 months after the entry into force of this Directive], ESMA shall submit to the Commission a report for the development of an integrated supervisory data collection, which shall focus on how to:

Added(a) reduce areas of duplications and inconsistencies between the reporting frameworks in the asset management sector and other sectors of the financial industry;

Added(b) data standardisation and efficient sharing and use of data already reported within any Union reporting framework by any relevant competent authority, at Union or national level.

Added3. When preparing the report referred to in paragraph 2, ESMA shall work in close cooperation with the European Central Bank (ECB), the other European Supervisory Authorities and, where relevant, the national competent authorities.

Added4. Following the review referred to in paragraph 1, and after consulting ESMA, the Commission shall submit a report to the European Parliament and to the Council presenting the conclusions of that review.

AddedThe Commission shall gather information for that report without broadening reporting obligations, including for AIFMs, and by using information from all relevant and reliable sources, including Union institutions, national competent authorities or internationally recognised bodies and organisations.’;

Added(22) Annex I is amended as set out in Annex I to this Directive;

Added(23) The text in Annex II to this Directive is added as Annex V.

AddedAmendments to Directive 2009/65/EC

AddedDirective 2009/65/EC is amended as follows:

Added(1) in Article 2(1), the following point (u) is added: