Identification of alternative managers Directive investment funds (AIFMD)’
Alternative managers Directive investment funds (AIFMD) in the European Union (EU) regulation with regard to hedge funds, private equity funds and real estate funds. Institutional funds, which fall under AIFMD were previously outside the financial EU rules for disclosure of information and transparency, including the markets in financial instruments (mifid). In AIFMD sets standards in the marketing order to attract private capital, compensation policy, risk monitoring and reporting, and shared responsibility. In the AIFMD is part of a larger push for investor protection that the EU had taken shortly before the financial crisis of 2007-08, after which aktiviziruyutsya efforts due to systematic risks, the crisis has shown.
Breaking down the ‘managers Directive the alternative investment Fund (AIFMD)’
In AIFMD has two main objectives, laid down in it. First, the AIFMD aims to protect investors by imposing more strict adherence to how and what information is revealed. This includes conflict of interest, profiles of liquidity and independent valuation of the property. The Directive indicates that alternative investment funds (AIF) is intended only for professional investors, although some member States can choose to make these funds available to retail investors until additional security measures are applied at the national level.
AIFMD and systemic risk
The second objective of AIFMD is to remove some of the systemic risk that these funds may pose to the EU economy. In order to do this, AIFMD mandates of the remuneration policy to be structured in a way that is not conducive to excessive risk taking that the financial levers it is reported that the European systemic risk Board (ERSB), and that means having a robust system of liquidity risk management that take into consideration.
Increasing regulatory requirements has led people to the assumption that hedge funds and private equity will exit the EU market. This did not happen, despite the increase in EU on the threshold of the cost of compliance. Compliance with AIFMD is required in order to obtain a “passport” to sell financial services in the EU market. As the EU is still one of the richest regions in the world, hedge funds and private equity funds invest in management, even when they complain about the burden and issues dire warnings from competition suffer.