ESMA clarifies final guidelines on reporting obligations under AIFMD
ESMA, the European Securities and Markets Authority, has published its final guidelines on reporting obligations for alternative investment fund managers.
AIFMD reporting obligations affect hedge funds, private equity and real estate funds. These must regularly report certain information to national supervisors.
The latest guidelines are intended to ensure consistency in the type of information that is being reported. ESMA has also put forward the idea of additional periodic reporting on information such as Value-at-Risk of alternative investment funds, or the number of transactions carried out using high frequency trading algorithms.
Steven Maijoor, ESMA chair, said: “One of the key objectives of the AIFMD is bringing the alternative fund world under supervision thus providing more transparency to investors and regulators. As the AIFMD came into force in July, both AIFMs and national supervisors now need to prepare for their regulatory filings as it is these reports which will enable supervisors to monitor the systemic risks of AIFs. In order to achieve this objective, national supervisors should receive all the necessary information in order to ensure an appropriate overview of the sector. Our guidelines and Opinion will help to standardise the reporting across the EU. It will also facilitate the exchange of information between national regulators, ESMA and the ESRB.”
The guidelines suggest alternative investment funds will have to report on:
• the breakdown of investment strategies of AIFs
• the principal markets/ instruments in which an AIF trades;
• total value of assets under management of each AIF managed;
• turnover of the AIFs; and
• principal exposures and most important portfolio concentration of the AIFs.
The additional reporting suggested by ESMA would include:
• AIFs’ risk measures;
• the liquidity profile of the AIFs; and
• the leverage of the AIFs.
ESMA has also published technical supporting material – a consolidated reporting template, detailed IT guidance for filing of the XML and the XSD schema – that will facilitate the reporting by AIFMs to regulators.
The Authority said that the guidelines will next be translated into the official EU languages, with national authorities then having two months from the date of the publication of the translations to confirm to ESMA whether they comply or intend to comply with the Guidelines by incorporating them into their supervisory practices.
The guidelines and supporting material can be obtained from ESMA’s website here: http://www.esma.europa.eu/page/Investment-management-0