Comment Letter to Responding to ESMA’s Call for Evidence Regarding Level 2 Implementation of the Alternative Investment Fund Managers Directive

On January 14, MFA submitted comments to the European Securities and Markets Authority (ESMA) in response to a call for evidence by ESMA predecessor entity, the Committee of European Securities Regulators, regarding Level 2 implementation of the Alternative Investment Fund Managers Directive (the AIFMD). In our letter, we encouraged ESMA to provide guidance to the European Commission on several key issues, including: (1) the determination of the AIFM in the context of global firms with European sub-managers; (2) global coordination of reporting requirements for fund managers and protection of confidential information; (3) developing a definition or definitions of leverage that will provide the most useful information to regulators and other market participants by accounting for factors such as the source and type of funding creating the leverage and the types of assets being leveraged; and (4) provisions relating to non-EU fund managers, including developing clear guidelines regarding cooperation agreements, the determination of an AIFMs Member State of reference, the standard of liability for a non-EU AIFMs legal representative, and the ability of sophisticated parties to choose the law governing their contractual rights. As the call for evidence is just the beginning of the Level 2 implementation of the AIFMD, we also noted our willingness to engage in a constructive dialogue with ESMA throughout the Level 2 process.