The longest journey starts with a single step

The longest journey starts with a single step

The Alternative Investment Fund Managers (AIFM) Directive came into force in July 2011. EU Member States have two years to implement it. Luxembourg has been very active in the consultation process, but there is a lot of work still to be done transforming theory into practice. Chris Stuart-Sinclair, Director, Regulatory Consulting at Deloitte Luxembourg, presented the results of a survey on trends and developments relating to the AIFMD at a conference in Luxembourg on Tuesday 11 October 2011.

What are the key findings of this survey?

There were a number of significant findings in the survey; the anticipated increase in costs, the role that distribution will play as a business driver, potential intentions to re-locate business all deserve mentioning, with particular focus on the Depositary Bank Liability regime.

How well is Luxembourg prepared for AIFMD?

With its usual pragmatism, Luxembourg has been extremely organised in actively participating in the consultation process; but now there is a lot of work still to be done transforming theory into practice.

Could this be the beginning of a new "success story" like UCITS?

A majority of respondents cited an increase in Investor Confidence, followed closely by Distribution as the greatest opportunities offered by AIFMD. This certainly suggests the beginning of an experience similar to UCITS. However, a greater majority – 70%  - believed that the benefits would not be commensurate with the efforts required. So the road to success will be long and possibly arduous. But the longest journey starts with a single step.

Regarding investor protection, is the investor assumed to understand some of the risks?

With regard to the provisions for third country Distribution the answer is clearly “yes”, given that the measures applying specifically to “Professional Investors”. CW

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