22 July 2013 is a day that will either unleash great potential from alternative investment funds and managers, or result in a regulatory quagmire.
Key issues the industry has struggled with are the timing of implementation and the associated costs.
One example comes from Sweden, where the Swedish Financial Supervisory Authority (Finansinspektionen) as recently as February this year put out proposals around the implementation of AIFMD.
The proposals created particular reactions in the constituent of so-called Specialfonder - ‘special funds' - that previously have been defined as having certain opt outs from prevailing funds law in the country.
One of the proposals is that ‘special funds' be encompassed by rules governing AIFs under AIFMD, to thus offer a certain level of consumer protection. But this was arguably part of the benefits of seeking ‘special fund' status previously, especially in cases where products only sought out institutional investors.
Even at that late stage, February, the Supervisory Authority was making guesswork out of the actual number of products and people that might come to be covered by AIFMD, admitting that "the number of AIF managers that will actually require authorisation after the proposed law on managers of AIFs has come into force could differ significantly from the figures presented here." At the time it estimated "circa" 190 management companies would be covered by the law.
The Supervisory Authority also put forward best estimates of the costs of AIFMD implantation - including the idea that it would, on average, cost SEK2,000 (€229) per year for quarterly reports in cases of AIF managers marketing AIFs to non-professional investors. Few in the industry seemed content with the certainty with which the Supervisory Authority put forward its estimates of costs.
Meanwhile, the short time-frame for implementing AIFMD in light of the delay by national governments and regulators to make the necessary changes at the national level has caused an entire micro-industry to sprout - conference events, publications, consultancy services - with a focus on ensuring AIF managers have access to the information they need to ensure compliance with the regime.
As noted by Keith Burman (pictured left), senior managing director at State Street in Luxembourg: "Industry bodies, including the European Fund and Asset Management Association (EFAMA) and the Association of Global Custodians (AGC), have raised significant objections to elements of the regulations. Worries over the cost of implementation and the timeline for the transposition of the AIFMD in EU member states have added to the uncertainty."
As if to underline these concerns, the Association of the Luxembourg Fund Industry scheduled one of its Leading Edge conferences for 9 July, solely on AIFMD Implementation. Elsewhere, Asset Risk Consultants appointed Paul Meader to launch a new fund solutions division, with an initial focus on AIFMD.
Meader said: "The increasing requirements of governance and regulators on funds and their boards highlight the need to provide insightful and independent assistance to investment managers and fund directors. This is a challenging time to be a fund director and I am excited about joining ARC to help provide the solutions to knotty issues like AIFMD."