a. HMT responds to consultation on transposing AIFMD

On 17 May 2013, HM Treasury (HMT) published a response to its March 2013 consultation on transposing the AIFMD. The response includes the following key points:

• Regulations are being amended to permit investment by EEA charities.
• The approved persons regime will not apply to internally managed investment companies.
• The Financial Services Compensation Scheme (FSCS) will be applied to non-UK managers of Alternative Investment Funds.
• Sections 270 and 272 of FSMA will be reformed into a single gateway for non–UK fund managers.

For further details on the March 2013 consultation, see our bulletin dated 8 April 2013.

On 13 May 2013, HMT published its response to its January 2013 consultation on transposing the AIFMD, together with a revised draft version of the Alternative Investment Fund Managers Regulations 2013 (Regulations).

The response includes the following key points:

• Requirements for sub-threshold managers. The Government will not impose any new requirements on sub-threshold managers of authorised funds as part of AIFMD implementation.
• Definition of AIF. HMT stated it would not be possible to amend legislation to create separate and exclusive definitions of an alternative investment fund (AIF) and collective investment scheme. However, HMT noted that it would be possible to review this issue at a later stage.
• Ancillary activities. The Government will include the functions of ancillary activities listed in Annex 1, paragraph 2 of the AIFMD within the new regulated activity of managing an AIF.
• Transitional arrangements. The transitional provisions in the Regulations have been amended to:

• provide a transitional period for both EEA and third country alternative investment fund managers (AIFMs);
• clarify that the obligation to make an application for permission or registration only applies to UK AIFMs that continue managing an AIF after 21 July 2014;
• permit an AIFM to manage other AIFs and make use of the grandfathering provisions relating to closed-ended AIFs that make no additional investments or whose subscription period has ended; and
• increase flexibility for depositaries of AIFs, provided prescribed conditions are met.
• Marketing. Part 8 of the Regulations has been amended to improve clarity and to ensure that activities outside the scope of the Directive are not inadvertently captured. The registration process for AIFMs seeking to market in the UK under Article 36 or 42 of the AIFMD has been replaced with a process where an AIFM will only need to notify the FCA to market AIFs in the UK.

For further details on HMT’s January 2013 consultation, see our bulletin dated 18 January 2013.

b. AIFMD implementing Regulations published in Official Journal

On 16 May 2013, the texts of the following European Commission implementing Regulations required under the AIFMD were published in the Official Journal of the European Union:

• The text of Commission implementing Regulation (Regulation 447/2013) of 15 May 2013 establishing the procedure for AIFMs which choose to opt in under the AIFMD.
• The text of Commission implementing Regulation (Regulation 448/2013) of 15 May 2013 establishing a procedure for determining the member state of reference of a non-EU AIFM pursuant to the AIFMD.

Article 2 of the implementing Regulations states that both will come into force on the twentieth day following their publication in the Official Journal and shall apply from 22 July 2013.

c. AIFMD Q&A published by HMT

On 1 May 2013, HMT published a number of Q&As on the transposition of the AIFMD. The Q&A cover a range of technical issues relating to, among other things, the transitional arrangements under the AIFMD, marketing and the definition of an AIFM