French regulator challenged on AIFMD – Fund Forum

A senior manager at France’s AMF has said managers who come under the Alternative Investment Fund Managers Directive should trumpet the extra protection it affords investors as a benefit of other investments, rather than emphasising the rules’ negative points.

Asset managers sharing the panel with the AMF representative at the Fund Forum in Monaco yesterday countered the contentious AIFMD was too complex, and would create extra layers or confusion in an already-baffling fund market for some clients.

One fund manager said it was time to stop debating and make sure one was compliant with the provisions.

Edouard Vieillefond, managing director in the AMF’s regulation, policy and international affairs division, said managers should use the provisions, currently approaching ‘Level II’ status before final implementation during next year, to highlight the extra protections surrounding the product.

Provisions around the depository function, for example, could make a regulated alternative investment fund preferable to a bond, for example, he said.

“It is important to explain this regulation is better and guarantees certain things for investors.”

He said it was entirely possible under the coming regulation distributable funds would be fitted into one of three buckets – simple funds for mass retail distribution, more complex Ucits for institutional use, and AIF.

But Jean-Baptiste de Franssu, chairman of Incipit, said having so many categories merely confused further the industry, already facing a raft of regulation such as AIFM and Mifid, and the erosion of commission-paying power.

He said AIFM came far more from concerns over systemic risk and financial stability than a directive bringing more consumer protection.

Bill Scrimgeour, HSBC Securities Services’ global head of regulatory and industry affairs, said debate about the AIFM was effectively now finished, and it was time to “stop talking and get ready for it, to be compliant. There has been a lot of hype about costs and regulation, entirely driven by uncertainty and scaremongering.”

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