MFA Comment Letter to Financial Conduct Authority on AIFMD Implementation

MFA submitted a comment letter to the UK’s Financial Conduct Authority (formerly the Financial Services Authority) in response to the FCA’s second consultation paper on implementation of the AIFMD.  In the letter, MFA encouraged the FCA to: (1) amend the proposed FCA regulations in a manner consistent with the proposed regulations of Her Majesty’s Treasury and provide a one-year transition period for all fund managers covered by the AIFMD, and not just for UK fund managers as the FCA previously proposed; (2) also consistent with the position taken by HM Treasury, permit UK fund managers to use one or more depositaries when marketing non-EU funds; (3) adopt, as proposed, a qualitative approach with respect to determining when a delegation arrangement would lead to a so-called “letter box” entity; (4) adopt a residence test, rather than the proposed domicile test, for determining when a manager is marketing to EU investors, in order to promote greater consistency and certainty in applying the AIFMD rules and to avoid potential conflicts of law that could result from applying a test based on domicile; and (5) amend the FCA’s discussion on passive marketing to avoid the use of narrow examples that create uncertainty about the scope of passive marketing activities.