FEBRUARY 6, 2013
INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
AIFM Directive 2013 Update: Marketing by US and Other Non-EU
Managers
Introduction
This Update considers what US and other non-EU alternative investment fund managers (“AIFMs”), in particular
hedge fund and private equity fund managers, will need to do in order to market their alternative investment funds
(“AIFs”) in the EU under the EU Alternative Investment Fund Managers Directive (the “AIFMD”). We will be
publishing a separate Update focusing on US and other non-EU AIFMs who manage EU AIFs.
The main “Level 2” regulation relating to the AIFMD (the “Level 2 Regulation”) was adopted by the European
Commission (the “Commission”) on 19 December 2012.1 Although some issues could still benefit from clarification,
US and other non-EU AIFMs will need to plan now on how they will market their AIFs into the EU.
Please refer to our main Update AIFM Directive 2013 Update: Overview and Final Steps to Implementation for a complete
overview of the AIFMD (including those provisions of the AIFMD which are not directly relevant to non-EU AIFMs).
Among other things, that main Update discusses the issue of who is the “AIFM” for purposes of the AIFMD. NonEU managers who have EU-based sub-advisory/sub-management affiliates may wish to consider that issue in the
context of their group structures, although in many cases it is expected that the “AIFM” would be the non-EU
manager rather than the EU sub-advisor/sub-manager.
Timing
The AIFMD is required to be implemented in EU Member States by 22 July 2013 (the “Implementation Date”), but
the AIFMD provides for a transitional period of one year (i.e., until 22 July 2014) for existing AIFMs to comply with
the AIFMD and apply for authorisation. However, the Commission appears to be taking the view that such AIFMs
must nonetheless comply with the AIFMD on a “best efforts” basis in the meantime. If so, non-EU AIFMs would
appear to be subject to the marketing restrictions and requirements in the AIFMD from the Implementation Date.
Given the late adoption of the Level 2 Regulation, there has been some speculation that the implementation date for
the AIFMD may be delayed. However the assumption in this Update is that there will be no delay in implementation.
Commission Delegated Regulation (EU) No .../... supplementing Directive 2011/161/EU with regard to exemptions, general operating
conditions, depositaries, leverage, transparency and supervision (http://ec.europa.eu/internal_market/investment/docs/20121219directive/delegated-act_en.pdf). The Level 2 Regulation is subject to a three-month scrutiny period by the European Parliament and the
Council of the EU, after which it will be published in final form in the EU Official Journal.
1
Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.
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INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
Page 2
Definition of “marketing”
“Marketing” for the purposes of the AIFMD means any offering or placement of shares or units in AIFs “at the
initiative of the AIFM or on behalf of the AIFM” to or with EU investors. This means that “passive” marketing (e.g.,
marketing at the initiative of the investor on a “reverse solicitation” basis) would generally not be caught by the
AIFMD and non-EU AIFMs marketing AIFs in the EU on that basis would not need to comply with the AIFMD.
However, non-EU AIFMs planning to rely on “reverse solicitation” should put in place policies and procedures in
order clearly to demonstrate that a particular EU investor invested on the basis of a reverse solicitation. In addition,
such non-EU AIFMs will need to ensure that follow-up communications and meetings with such investors do not
result in active marketing (for example of another AIF). It remains to be seen whether ESMA will provide specific
guidance (for example through Q&A) in relation to reverse solicitation.
Finally, note that the words “or on behalf of the AIFM” mean that, even if an AIFM were to use distribution or
placement agents to market its AIFs, that AIFM would still be regarded as carrying on the “marketing” and thus be
subject to the marketing provisions of the AIFMD.
Action points to consider
•
Determine extent of active marketing versus passive marketing/reverse solicitation.
•
If relying on reverse solicitation, develop policies and procedures to ensure an appropriate and accurate
audit trail for each investor.
Dual regime for marketing
The AIFMD establishes a dual regime for the marketing of AIFs to investors in the EU. In broad terms, a non-EU
AIFM can market its AIFs in the EU either:
•
under the national private placement regime in each EU Member State (that is, in accordance with local marketing
rules – if any – in each EU Member State); or
•
under an EU-wide “passport” regime throughout the whole of the EU (that is, individual EU Member States’
marketing rules should not be relevant).
The passport regime will not be available until (at the earliest) late 2015 and only if the European Securities and
Markets Authority (“ESMA”) makes a recommendation to make the “passport” available to non-EU AIFMs and the
European Commission “activates” the passport provisions by adopting a delegated act. This Update will therefore
focus on marketing under the national private placement regime, as that is more pressing and relevant for US and other
non-EU AIFMs.
Note that the AIFMD marketing provisions apply whether the AIF being marketed by the non-EU AIFM is a non-EU
AIF (e.g., a Cayman fund) or EU AIF (e.g., an Irish fund). However, a non-EU AIFM which manages an EU AIF should
be aware that, assuming the passport regime is activated in late 2015, that non-EU AIFM will at that time need to apply
for authorisation (registration) and comply fully with the AIFMD.2
Finally, note that it is possible that the national private placement regime may be removed at the end of 2018, leaving
only the passport regime. If that happens, all non-EU AIFMs who wish to continue marketing their AIFs into the EU
will need to apply for authorisation and comply fully with the AIFMD.
2
Please see our separate Update, to be published shortly, on the specific issue of non-EU AIFMs managing EU AIFs.
INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
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Action points to consider
•
Prepare for national private placement as discussed below, but consider whether authorisation from late
2015 is desirable or necessary, depending on:
o
whether use of the passport regime may be beneficial in view of local restrictions or the availability of
the private placement regime; and
o
whether the non-EU AIFM is managing any EU AIF.
Conditions for non-EU AIFMs marketing AIFs in the EU
For a non-EU AIFM to be able to market its AIFs to investors in any EU Member State, the following conditions
must be met:
•
the relevant EU Member State must have a private placement regime which permits non-EU AIFMs to market
AIFs in that Member State;
•
the non-EU AIFM must comply with the disclosure and transparency (but not other) requirements of the AIFMD
(as detailed below), as well as any additional local requirements of that EU Member State;
•
cooperation arrangements must be in place between the regulator of that EU Member State and the regulator of
the non-EU AIFM’s home country and, if the AIF is a non-EU AIF such as a Cayman fund, the regulator of the
AIF’s country as well; and
•
the home country of the non-EU AIFM and, if applicable, that of the non-EU AIF, must not be listed as “noncooperative countries” by the Financial Action Task Force.3
As the marketing will be carried out under the applicable EU Member State’s national regime, there may be other local
requirements that must be complied with. Indeed, a particular EU Member State could decide that its national private
placement regime consists of full compliance with the AIFMD; it could also simply ban all marketing of AIFs at its
discretion. In the case of the UK, HM Treasury has proposed not to change the UK’s existing marketing regime; that
is, the UK intends to require only the AIFMD-minimum disclosure and transparency requirements.
Cooperation arrangements
In relation to the cooperation arrangements mentioned above, ESMA is currently negotiating on behalf of all EU
Member States with regulators in relevant third country jurisdictions to reach agreement, in the form of memoranda of
understanding (“MoUs”) based on the templates produced by IOSCO. It is understood that ESMA expects to agree
MoUs with regulators in the key non-EU jurisdictions in advance of the Implementation Date.
Registration requirement for AIFs
As noted below, a non-EU AIFM marketing under the national private placement regime will need to comply with
certain disclosure (to investors) and transparency (to regulators) requirements. In order to provide regular reporting to
the relevant EU Member State regulators, an AIFM is likely to have to register the relevant AIFs with the regulator in
each EU Member State in which it carries out active marketing.
In the UK, for example, HM Treasury is considering maintaining an “Article 42 Register” for AIFs managed by nonEU AIFMs and that have been approved by the Financial Conduct Authority4 for marketing in the UK.
3
A list of such countries may be found at http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/.
4
The successor entity to the UK Financial Services Authority from April 2013.
INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
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Action points to consider
•
Determine which EU Member States are of interest from an active marketing standpoint.
•
Obtain legal advice as to the parameters of the relevant EU Member State private placement regime.
•
Prepare for registration of the relevant AIFs with the relevant Member State regulators (in order to be able
to submit regular reports as detailed below).
•
Check that the relevant non-EU country has appropriate cooperation arrangements in place.
•
Check that the relevant non-EU country is not on the list of “non-cooperative countries” published by the
FATF.
Disclosure and transparency requirements
Overview
The disclosure and transparency requirements in the AIFMD with which non-EU AIFMs marketing AIFs in the EU
must comply can be categorised into three groups:
•
disclosure to investors;
•
annual reports; and
•
reporting to EU Member State regulators.
“Investors” means EU investors in the AIFs that are being marketed in the EU. “Regulators” means the relevant
regulator(s) in the EU Member States into which the AIF is being marketed.
The provisions on disclosure and transparency cross-refer to other provisions of the AIFMD which apply only to
authorised AIFMs (for example, regulatory capital, remuneration policies, valuation procedures). One assumes that
non-EU AIFMs will not have to comply with these provisions “by the back door” by virtue of having to disclose the
relevant items; however, no definitive statements by the relevant authorities has yet been made on this issue.
An overview of the three items above is provided below; further details are set out in the Annex to this Update.
Action points to consider
•
As a general matter, consider whether the benefits of active marketing exceed the costs of compliance
with not only the minimum disclosure and transparency requirements set out below, but also with any
additional requirements Member State regulators have the discretion to impose.
•
Consider whether reverse solicitation, for which the AIFMD requirements will not apply, is a realistic
alternative.
Disclosure to investors
The AIFMD specifies various disclosures that must be made to EU investors prior to their investment in the AIF. The
required information (which in many cases is generally consistent with matters normally disclosed in offering
memoranda) includes, among other things:
•
the AIF’s investment strategies, investment policy and investment restrictions;
INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
Page 5
•
circumstances where leverage may be used and details of any collateral and asset reuse/rehypothecation
arrangements;
•
a description of the valuation procedure and pricing methodology for the assets;
•
a description of the liquidity arrangements;
•
a description of fees and expenses;
•
details of side letters (including the types of investors who obtain such side letters); and
•
a description of prime brokerage arrangements.
The non-EU AIFM is required “periodically” to disclose to investors information on:
•
the percentage of illiquid assets subject to special arrangements (e.g., side pockets);
•
any new arrangements for managing the liquidity of the AIF; and
•
the current risk profile of the AIF and the risk management systems employed by the AIFM.
In respect of each AIF marketed by it that employs leverage, the non-EU AIFM is required to disclose to investors “on
a regular basis”:
•
any changes to: (i) the maximum level of leverage that the AIFM may employ on behalf of the AIF; and (ii) any
right of reuse of collateral or any guarantee granted under the leveraging arrangement; and
•
the total amount of leverage employed by the AIF.
Leverage for these purposes must be calculated using both the “gross method” and the “commitment method” set out
in the Level 2 Regulation. However, the AIFMD and the Level 2 Regulation do not appear to preclude the non-EU
AIFM from also including in its reports leverage figures calculated using any other method, provided that the figures
calculated using the “gross method” and the “commitment method” are disclosed.
Action points to consider
•
Prepare a checklist of items required to be disclosed to investors, comparing that to the AIF’s documents.
•
Prepare for calculation of leverage in accordance with the “gross method” and the “commitment
method”.
Annual report (including remuneration disclosure)
For each AIF marketed to EU investors, an annual report must be produced and made available to investors on
request, no later than six months following the end of the financial year. The annual report must also be made
available, on request, to the regulators in the relevant EU Member States.
The Level 2 Regulation prescribes the minimum line items to be included in the balance sheet and income statements,
although the layout, nomenclature and terminology of the line items may be amended or extended to ensure
compliance with the relevant accounting standards adopted by the AIF and any applicable legislative requirements.
In addition to the financial statements, the annual report must include information on any material changes to the
information disclosed to investors (as described above) as well as information on remuneration consisting of:
•
the total amount of remuneration for the financial year, split into fixed and variable remuneration, paid by the
AIFM to its staff, and number of beneficiaries, and, where relevant, carried interest paid by the AIF. The Level 2
Regulation adds that AIFMs must provide general information relating to the financial and non-financial criteria of
INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
Page 6
the remuneration policies and practices to enable investors to assess the incentives created by the AIFM and, as
such, understand the risk profile of the AIF; and
•
the aggregate amount of remuneration broken down by senior management and members of staff of the AIFM
whose actions have a material impact on the risk profile of the AIF.
The ESMA Guidelines on remuneration will provide further details of staff which are covered by the remuneration
rules (known as “Identified Staff”).
US and other non-EU AIFMs with EU (particularly UK) based regulated affiliates will be familiar with remuneration
disclosure, in that many such regulated affiliates currently are required to publish “Pillar 3” and Remuneration Code
(for the UK) disclosures.
Action points to consider
•
Check that any annual report prepared complies with the items contained in the Level 2 Regulation and
prepare remuneration disclosure.
•
Start identifying staff who will fall within the categories of “Identified Staff”.
Reporting to regulators
A non-EU AIFM is required to report specified information on a regular basis to the regulators of each of the EU
Member States where its AIFs are marketed.
The reporting template is contained in Annex IV of the Level 2 Regulation. The information required is similar in
many ways to Form PF, which US managers will be familiar with. However, Annex IV differs from Form PF not only
in terms of format, but also in certain specific ways. For example, the calculation of assets under management (AUM)
and leverage would differ as between Form PF and the AIFMD form, so it will not be possible simply to copy
wholesale the information in Form PF over into the AIFMD form.
Where the AIFs employ leverage on a “substantial basis”, the non-EU AIFM is required to provide the relevant
regulators with information about the overall levels of leverage employed by each relevant AIF, a breakdown between
leverage arising from borrowings (including identifying the five largest sources of borrowed cash or securities) and
from derivatives and the extent to which the AIF’s assets have been made subject to rehypothecation. The Level 2
Regulation specifies that “substantial basis” means the relevant AIF’s exposures calculated under the “commitment
method” exceeds three times the net asset value of the AIF.
As for the timing and frequency of reporting, the non-EU AIFM must provide the relevant report to the relevant EU
Member State regulator(s) not later than one month after the end of the relevant period (although the period is
extended by 15 days for funds of funds). The “relevant period” depends on the total AUM of all AIFs managed by the
AIFM. Broadly speaking, for hedge fund managers:
•
AIFMs managing AIFs with an AUM between EUR 100 million and EUR 1 billion are to report on a half-yearly
basis; provided that, where the AUM of any AIF exceeds EUR 500 million (including assets acquired through use
of leverage), the AIFM shall report for that AIF on a quarterly basis; and
•
AIFMs managing AIFs with an AUM above EUR 1 billion shall report on a quarterly basis.
The calculation of the relevant thresholds covers all AIFs managed by the non-EU AIFM, whether or not marketed in
the EU (other than the case of the single AIF exceeding EUR 500 million); however, the content of the reporting to
the relevant regulators relates only to each AIF marketed in the EU.
INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
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Private equity managers5 will generally be required to report on an annual basis.
Action points to consider
•
For US managers in particular, carry out a comparison of Form PF and the AIFMD form in order to
determine which line items can or cannot be used in both forms.
•
Given the tight timing (one month for funds with an additional 15 days only for funds of funds), consider
systems and procedures that will need to be put in place in order for the reports to be generated in the
time required.
Private equity-specific requirements
Where an AIF acquires 50% or more of the voting rights of an EU non-listed company (not including small and
medium enterprises), the non-EU AIFM would have to provide information of its holding: (i) to the company; (ii) to all
other shareholders of the company; and (iii) to the regulators of each of the EU Member States where its AIFs are
marketed. The AIFM will also be obliged to make disclosures regarding, amongst other things, the future development
of the non-listed company either in such non-listed company’s annual report or, alternatively, in the annual report of
the AIF.
Next steps
EU Member States are preparing to release (and in some cases have already released) draft legislation amending their
national private placement regimes in order to align them with the requirements of the AIFMD. Managers will need to
monitor the progress of implementation of the AIFMD (and thus the local private placement rules) in each Member
State into which they plan actively to market their AIFs.
For further information regarding this Update, please contact the author or your regular Sidley lawyer.
Leonard Ng, Partner
LNg@sidley.com
+44 (0)20 7360 3667
That is, “AIFMs in respect of each unleveraged AIF under their management which, in accordance with its core investment policy,
invests in non-listed companies and issuers in order to acquire control” (Article 110(3)(d) of the Level 2 Regulation).
5
ANNEX: SUMMARY OF THE DISCLOSURE AND TRANSPARENCY REQUIREMENTS
*Note: It is assumed that non-EU managers will not be required to disclose all of the items listed below given that some items reflect requirements of the AIFMD which are not
applicable to non-EU managers.6 Such items have been marked with an asterisk, but it should be noted that Member States may nevertheless require non-EU managers to make
similar disclosures.
DISCLOSURE TO INVESTORS
Disclosure category
Content
Recipient/timing
Prior disclosure
1.
A description of:
Recipient:
a.
Investors of the AIF being
marketed in the EU
the investment strategy and objectives of the AIF
b. the procedures by which the AIF may change its investment strategy and/or investment policy
c.
the types of assets in which the AIF may invest
d. the techniques which the AIF may employ and all associated risks
e.
2.
any investment restrictions
Information on leverage, including:
a.
the circumstances in which the AIF may use leverage
b. the types and sources of permitted leverage and associated risks
c.
restrictions on the use of leverage
d. any collateral and asset reuse arrangements
e.
6
the maximum level of leverage which the AIFM is entitled to employ on behalf of the AIF
3.
If the AIF is a feeder fund, information on where any master fund is established
4.
If the AIF is a fund of funds, information on where the underlying funds are established
5.
A description of the main legal implications of the contractual relationship between the AIF and its
investors, including information on jurisdiction, applicable law and information on the recognition and
enforcement of judgments
This point has not yet been confirmed by ESMA or the Commission.
Timing:
Prior to investment being made
in the AIF
ANNEX: INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
Page 2
6.
The identity and duties of the AIFM, the AIF’s depositary, the AIF’s auditor and any other service
providers, together with a description of investors’ rights
7.
Information on how the AIFM complies with Article 9(7) of the AIFMD*7
8.
A description of any management function delegated by the AIFM (including information on any conflicts
of interest that may arise from such delegation)
9.
A description of any safe-keeping function delegated by the depositary (including information on any
conflicts of interest that may arise from such delegation)
10. A description of the AIF’s valuation procedure and its pricing methodology for valuing assets, including a
description of any methods used in valuing hard-to-value assets in accordance with Article 19 of the
AIFMD*
11. A description of the AIF’s liquidity risk management, including redemption rights and redemption
arrangements
12. A description of all fees, charges and expenses
13. A description of how the AIFM ensures fair treatment of investors
14. A description of any preferential treatment afforded to investors, including details of:
a.
the type of investors who may obtain such preferential treatment, and
b. where relevant, such investors’ legal or economic links with the AIF or AIFM
15. The AIF’s latest annual report (see below)
16. The procedure and conditions for the issue and sale of units or shares
17. The latest net asset value of the AIF or the latest market price of the unit or share of the AIF (in
accordance with Article 19 of the AIFMD)*
18. The historical performance of the AIF (where available)
19. A description of prime brokerage arrangements, including the prime broker’s arrangements with the
depositary
7
Article 9(7) of the AIFMD requires AIFMs to cover professional liability risks, by using additional own funds or professional indemnity insurance.
ANNEX: INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
Page 3
20. A description of how and when periodic disclosures will be made going forward
21. Information on any custody and sub-custody arrangements, and on any arrangements pursuant to which a
depository could transfer its liability to a sub-custodian
Periodic disclosures
1.
The percentage of the AIF’s assets which are subject to special arrangements due to their illiquid nature8
Recipient:
2.
Any new liquidity management arrangements
3.
The AIF’s current risk profile and the risk management systems employed by the AIFM to manage those
risks
Investors of the AIF being
marketed in the EU
Timing:
At the frequency contemplated
in the AIF’s constitutional
documents and at a minimum at
the same time as the annual
report
Disclosure on a
regular basis
1.
Any changes to:
Recipient:
a.
Investors of the AIF being
marketed in the EU
the maximum level of leverage that the AIFM may employ on behalf of the AIF
b. any right of reuse of collateral or any guarantee granted under the leveraging arrangement
2.
The total amount of leverage employed by the AIF
Timing:
For changes to leverage and
rights of reuse – “without undue
delay”
For total amount of leverage – at
the frequency contemplated in
the AIF’s constitutional
documents and at a minimum at
the same time as the annual
report
8
For example, side pocket arrangements.
ANNEX: INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
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ANNUAL REPORT
Disclosure
category
Content
Recipient/timing
Annual Report9
1.
Financial statements:
a.
Balance sheet
b. Income and expenditure account
To be prepared no later than 6
months after the end of the
financial year, and made
available to:
2.
Investment manager’s report:
•
a.
Overview of investment activities
Investors of the AIF being
marketed in the EU – to be
provided as part of prior
disclosure (see above), and
subsequently on request
•
Regulator in each Member
State into which the AIF is
marketed – to be made
available on request
b. Material changes to information listed under “Prior Disclosure” above
c.
Remuneration disclosure
REPORTING TO REGULATORS
Disclosure category
Content
Recipient/timing
Regular reports10
1.
The principal markets and instruments in which the AIFM trades on behalf of the AIFs it manages
Recipient:
2.
The principal exposures and most important concentrations of each of the AIFs which the AIFM manages
3.
The percentage of the AIF’s assets which are subject to special arrangements arising from their illiquid
nature
Regulator in each Member State
where the AIF is marketed
9
4.
Any new liquidity management arrangements
5.
The current risk profile of the AIF and the risk management systems employed by the AIFM
See Level 2 Regulation for detailed items.
10
See Annex IV of the Level 2 Regulation for the reporting template.
Timing:
•
AIFMs managing AIFs with
an AUM between EUR 100
ANNEX: INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
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Documents to be
provided on request
Additional
information in
relation to AIFs
employing leverage
on a “substantial
basis”
6.
The main categories of assets in which the AIF invests
7.
The results of stress tests performed in accordance with Articles 15 and 16 of the AIFMD*
1.
The annual report for each EU AIF managed by the AIFM and for each AIF marketed by it in the EU, for
each financial year
2.
For the end of each quarter, a detailed list of all AIFs which the AIFM manages.
1.
AIF’s overall level of leverage
2.
Break-down between leverage arising from borrowing of cash or securities and leverage embedded in
financial derivatives
3.
The extent to which the AIF’s assets have been reused under leveraging arrangements
4.
The identity of the five largest sources of borrowed cash or securities and the amounts of leverage received
from each of those sources
million and EUR 1 billion –
half-yearly basis; provided
that, where the AUM of any
AIF exceeds EUR 500
million (including assets
acquired through use of
leverage), the AIFM shall
report for that AIF on a
quarterly basis
•
AIFMs managing AIFs with
an AUM above EUR 1
billion – quarterly basis
•
AIFMs in respect of each
unleveraged AIF marketed
in the EU whose core policy
is to invest in EU non-listed
companies and issuers with
the view to acquire control –
annual basis
Regulator in each Member State
into which the AIF is marketed
Regulator in each Member State
into which the AIF is marketed
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PRIVATE EQUITY-SPECIFIC DISCLOSURES
Disclosure
category
Content
Recipient/timing
Disclosures on
acquisition of
control in unlisted
companies11
1.
•
Regulator in each Member
State into which the AIF is
marketed
b. Resulting situation with respect to voting rights
•
Non-listed company
c.
•
Non-listed company’s
shareholders12
•
Competent authority of the
non-listed company
•
AIF investors
Information to be provided to the unlisted company, its shareholders and the relevant regulator within 10
working days of acquiring control:
a.
2.
Notification of the acquisition of control, and date thereof
Conditions subject to which control was acquired
Information to be made available to the non-listed company, its shareholders, the relevant regulators (and, if
the relevant Member State so requires, the competent authority of the non-listed company):
a.
The identity of the AIFM(s) which manage the AIF(s) that have acquired control
b. The policy for preventing and managing conflicts of interest
c.
3.
The policy for internal and external communications relating to the company (especially its employees)
Information to be disclosed to the non-listed company and its shareholders:
a.
The AIF’s intentions with respect to the future business of the non-listed company
b. Likely repercussions on employment
11
4.
Information on the financing of the acquisition must be provided to the relevant regulator and AIF
investors
5.
A notification must also be made to the relevant regulator of the proportion of voting rights held by an AIF
in a non-listed company where the AIF hits a trigger point (i.e., 10%, 20%, 30%, 50% or 75%) through
either the acquisition or disposal of shares
These disclosure obligations will only apply where the non-EU AIFM manages one or more AIFs which either individually or jointly acquire control of a non-listed company.
Disclosure need only be made to shareholders whose identities and addresses are available to the AIFM or can be made available by the company, or through a register to which the AIFM “has or can
obtain access to”.
12
ANNEX: INVESTMENT FUNDS, ADVISORS AND DERIVATIVES UPDATE
Page 7
The London Financial Services Regulatory Group of Sidley Austin LLP
The London Financial Services Regulatory Group represents a broad range of financial institutions and related businesses, from established international groups to start-ups. We act for clients with extensive
UK, European and international operations, as well as for clients based in the US or elsewhere that wish to establish financial services businesses in the UK and the EU. We also represent clients before the
FSA, including in connection with examinations, investigations and enforcement actions. For further information on the London Financial Services Regulatory Group please contact:
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