Changes from report parliamentary committee draft to plenary report

RemovedArticle 1 – paragraph 1 – point 18 – point b, Article 47 – paragraph 4 – point d: deleted / (deleted)

Added(vii) for each of the following, a description of the human and technical resources’;

RemovedDirective 2011/61/EU

Added- employed by or committed to the AIFM for performing day-to-day portfolio or risk management tasks within the AIFM;

RemovedArticle 1 – paragraph 1 – point 19 – point a, Article 50 – paragraph 5: 5. Where the competent authorities of one Member State have reasonable 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 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- employed by or committed to the delegate for performing those services on a delegated basis; and

RemovedDirective 2011/61/EU

Added- employed by or committed to the AIFM for monitoring and controlling the delegate;

RemovedArticle 1 – paragraph 1 – point 19 – point b, Article 50 – paragraph 5a: 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.

Added(viii) an explanation of the added value of the delegation to the investor.’

RemovedDirective 2011/61/EU

Added(aa) the following paragraph is inserted:

RemovedArticle 1 – paragraph 1 – point 19 – point b, Article 50 – paragraph 5b: 5b. 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.

Added‘4a. An AIFM shall report to the competent authority any material changes that may affect the scope of the authorisation by that authority and in particular any modification on the arrangements of the delegation and sub-delegation to third parties provided at the time of authorisation.’

RemovedDirective 2011/61/EU

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

RemovedArticle 1 – paragraph 1 – point 19 – point b, Article 50 – paragraph 5c: 5c. 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 and ESMA and, in case of any potential risk to the stability and integrity of the financial system, the ESRB thereof, stating its reasons.

Added‘5. The competent authorities shall, on a quarterly basis, inform ESMA of authorisations granted or withdrawn in accordance with this Chapter, and of any changes in the scope of authorisations by those authorities, and in particular of material changes to the information provided in accordance with paragraphs 2 and 3 of this Article.

RemovedDirective 2011/61/EU

AddedESMA shall keep a central public register identifying each AIFM authorised under this Directive, a list of the AIFs managed and/or marketed in the Union by such AIFMs and the competent authority for each such AIFM. The register shall be made available in electronic format.

RemovedArticle 1 – paragraph 1 – point 19 – point c, Article 50 – paragraph 7 – subparagraph 1: 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 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.

Added▌

RemovedDirective 2011/61/EU

Added(ba) paragraph 6 is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 20, Article 61 – paragraph 5: 5. The competent authorities of the home Member State of an AIF or, in case where the AIF is not regulated, the competent authorities of the home Member State of an AIFM, may allow institutions referred to in point (a) of Article 21(3) and established in another Member State to be appointed as a depositary. When exercising that possibility, the competent authorities shall decide on a case-by-case basis and shall notify ESMA of decisions taken in that regard. This provision shall be without prejudice to the full application of Article 21, with the exception of point (a) of paragraph 5 of that Article on the place where the depositary is to be established.;

Added‘6. In order to ensure consistent harmonisation of this Article, ESMA may develop draft regulatory technical standards to specify the information to be provided to the competent authorities in the application for the authorisation of the AIFM, including the programme of activity, and to specify situations where the name of the AIFs it intends to manage could be materially deceptive or misleading to the investor.

RemovedDirective 2011/61/EU

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

RemovedArticle 1 – paragraph 1 – point 21, Article 69b – paragraph 1 – introductory part: 1. By .. [60 months after the entry into force of this Directive] and following the peer review 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(bb) paragraph 7 is replaced by the following:

RemovedDirective 2011/61/EU

Added‘7. In order to ensure uniform conditions for the application of this Article, ESMA may develop draft implementing technical standards to determine standard forms, templates and procedures for the provision of information provided for in the first subparagraph of paragraph 6. ESMA may design such forms, templates and procedures with the objective of obtaining information which is comparable between AIFMs and between jurisdictions. ESMA may also take into account the information requirements for the provision of the report referred to in paragraph 9.

RemovedArticle 1 – paragraph 1 – point 21, Article 69b – paragraph 1 a (new): 1 a. For the purposes of point (d) of paragraph 1, the Commission shall by ... [24 months after the entry into force of this Directive] carry out a comprehensive study on the potential benefits and risks of introducing an EU depositary passport.

AddedPower is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph of this paragraph in accordance with Article 15 of Regulation (EU) No 1095/2010.’

RemovedDirective 2009/65/EC

Added(c) the following paragraph ▌9 is added:

RemovedArticle 2 – paragraph 1 – point 3 – point b a (new), Article 13 – paragraph 2a (new): (ba) the following paragraph 2a is inserted: / ‘2a. By way of derogation from paragraphs 1 and 2 of this Article, where the marketing function, as referred to in the third indent of Annex II, is performed by one or several distributors which are not acting on behalf of the UCITS, pursuant to an agreement between the UCITS and that distributor or those distributors, such function shall not be considered to be a delegation that is subject to the requirements set out in paragraphs 1 and 2 of this Article.’

Added▌

RemovedDirective 2009/65/EC

Added9. By … [24 months after the date of application of this amending directive], ESMA shall provide the European Parliament, the Council and the Commission with ▌a report, ▌analysing market practices regarding delegation▌ and compliance with Articles 7 and 20.’;

RemovedArticle 2 – paragraph 1 – point 3 – point c – introductory part, Article 13 – paragraphs 3 to 6: (c) the following paragraphs 5 and 6 are added:

Added(4) in Article 8(1), point (c) is replaced by the following:

RemovedDirective 2009/65/EC

Added‘(c) the persons who effectively conduct the business of the AIFM are of sufficiently good repute and are sufficiently experienced also in relation to the investment strategies pursued by the AIF managed by the AIFM, the names of those persons and of every person succeeding them in the office being communicated forthwith to the competent authorities of the home Member States of the AIFM and the conduct of the business of the AIFM being decided by at least two natural persons who are either employed full-time by that AIFM or who are committed full-time or on a full-time equivalent basis to conduct the business of that AIFM and who are resident in the Union meeting such conditions;

RemovedArticle 2 – paragraph 1 – point 3 – point c, Article 13 – paragraph 3: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

Added(ca) where an AIFM manages an Alternative Investment Fund that is marketed to retail investors, the AIFM ensures that at least one member of its governing body is a non-executive director. The AIFM, in appointing a non-executive director of its governing body, shall determine whether such a member is independent in character and judgement and whether there are relationships or circumstances, which are likely to affect that member’s judgement. The AIFM shall take reasonable steps to ensure that any non-executive directors appointed to its governing body have sufficient expertise and experience to be able to make judgements on whether the AIFM is managing AIFs in the best interest of investors. Non-executive directors shall contribute to ensuring that the AIFM complies with the requirements regarding conflicts of interests and acting in the best interests of the AIFs and their investors, as specified in this Directive;

RemovedDirective 2009/65/EC

Added(4a) in Article 12, the following paragraph is inserted:

RemovedArticle 2 – paragraph 1 – point 3 – point c, Article 13 – paragraph 4: deleted / (deleted)

Added‘3a. For the purposes of point (f) of the first subparagraph of paragraph 1, ESMA shall ... [by 18 months from entry into force of this amending Directive] submit a report to the European Parliament, the Council and the Commission:

RemovedDirective 2009/65/EC

Added(1) assessing the costs charged by AIFMs to investors in AIFs, and the reasons for cost levels and for differences between them;

RemovedArticle 2 – paragraph 1 – point 3 – point c, Article 13 – paragraph 5: 5. By … [12 months before the date of the review referred to in Article 110a] ESMA shall provide the European Parliament, the Council and the Commission with a report analysing market practices regarding delegation to entities located in third countries and compliance with Articles 7 and 13.

Added(2) proposing criteria for assessing whether the level of such costs is or is not appropriate, in particular when compared to the level of costs in other jurisdictions worldwide;

RemovedDirective 2009/65/EC

Added(3) proposing, if necessary, options for action by competent authorities or by legislators in respect of inappropriate or undue levels of such costs. The report shall assess the potential impact of each such option.

RemovedArticle 2 – paragraph 1 – point 4, Article 18a – paragraph 2: 2. After assessing the suitability in relation to the pursued investment strategy, the liquidity profile and the redemption policy, a management company shall select at least one appropriate liquidity management tool from the list set out in Annex IIA, points 2, 3, 4, 5, 6 and 8, and include in the fund rule or the instruments of incorporation of the investment company for possible use in the interest of the UCITS’ investors. The management company shall implement detailed policies and procedures for the activation and deactivation of any selected liquidity management tool and the operational and administrative arrangements for the use of such tool.

AddedThat report may be combined with the report required pursuant Article 14(2a) of Directive 2009/65/EC of the European Parliament and of the Council.

RemovedDirective 2009/65/EC

AddedCompetent Authorities shall have the power to require, on a one-time basis, information on costs from AIFMs insofar as that is needed for the purpose of that report. The competent authorities shall avoid duplication with existing reporting obligations.