DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

EN EN EN COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30.4.2009 SEC(2009) 576 COMMISSION STAFF WORKING DOCUMENT Accompanying the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Alternative Investment Fund Managers and amending Directives 2004/39/EC and 2009/…/EC IMPACT ASSESSMENT {COM(2009) 207} {SEC(2009) 577} EN EN TABLE OF CONTENTS 1. Introduction.................................................................................................................. 4 1.1. The investment fund universe...................................................................................... 4 1.2. Structure and location of AIF and AIFM..................................................................... 5 1.3. Investor base of AIF..................................................................................................... 6 1.4. Risks associated with AIFM activity........................................................................... 7 1.5. AIFM and the financial crisis....................................................................................... 8 1.6. Focus of impact assessment....................................................................................... 10 2. Procedural issues and consultation of interested parties............................................ 10 2.1. Consultation and expertise......................................................................................... 10 2.2. How has the opinion of the Impact Assessment Board been taken into account?..... 12 3. Problem description ................................................................................................... 13 3.1. Description of the regulatory patchwork ................................................................... 15 3.1.1. Community rules........................................................................................................ 15 3.1.2. National rules............................................................................................................. 15 3.2. To what extent are existing rules effective in responding to the risks?..................... 18 3.2.1. Macro-prudential (systemic) risks.............................................................................. 18 3.2.2. Micro-prudential risks................................................................................................ 19 3.2.3. Investor protection ..................................................................................................... 19 3.2.4. Market efficiency and integrity.................................................................................. 21 3.2.5. Impact on market for corporate control ..................................................................... 21 3.2.6. Acquisition of control of companies by AIFM.......................................................... 22 3.2.7. Conclusions................................................................................................................ 23 3.3. Internal Market aspects.............................................................................................. 24 3.4. Conclusions................................................................................................................ 25 4. Objectives................................................................................................................... 26 5. Options – Analysis of impacts................................................................................... 26 5.1. Target of measure....................................................................................................... 26 5.2. Coverage of measure.................................................................................................. 26 5.3. How much of the AIFM value chain should be required to be in the EU?................ 26 5.4. Appropriate level for potential action........................................................................ 26 5.5. Subsidiarity ................................................................................................................ 26 5.6. Provisions of a potential proposal and expected impacts........................................... 26 6. Comparing the options: Conclusions......................................................................... 26 7. Monitoring and evaluation......................................................................................... 26 ANNEX I: Acronyms............................................................................................................... 26 ANNEX II: Categories of non-harmonised funds (non-UCITS)............................................. 26 ANNEX III: European Private Equity activity in 2007 ........................................................... 26 ANNEX IV: Key UCITS investor protection safeguards........................................................ 26 ANNEX V: Qualified Investor vs Professional Client vs Eligible counterparty..................... 26 ANNEX VI: Risks related to activities of alternative investment fund managers (AIFM)..... 26 ANNEX VII: Executive Summary of the Impact Assessment on Private Placement ............. 26 ANNEX VIII: Summary of responses to Commission consultation on hedge funds.............. 26 ANNEX IX: Outline of relevant measures proposed in the Commission communication on Driving European Recovery of 4 March 2009......................................................................... 26 ANNEX X: Effectiveness of existing industry codes and best practice guidelines for private equity and hedge funds............................................................................................................. 26 Annex X.B. Effectiveness of industry codes and best practice guidelines for Hedge Funds .. 26 EN 2 EN ANNEX XI: The Lamfalussy process...................................................................................... 26 ANNEX XII: References ......................................................................................................... 26 EN 3 EN 1. INTRODUCTION Sections 1.1 - 1.3 of this introductory chapter describe the size and composition of the alternative investment industry in the European Union, the structure and geographical location of alternative investment funds (AIF) and their managers (AIFM), and the nature of the investors in these funds. Sections 1.4 and 1.5 then discuss the risks associated with the activities of AIFM and how they have manifested themselves during the financial crisis. Section 1.6 introduces the core concern of this impact assessment: the extent to which the nationally-fragmented regulatory environment for AIFM provides an effective and efficient framework for the regulation and oversight of this industry, in particular for the monitoring and management of risks that are of cross-border concern. 1.1. The investment fund universe In the EU, investment funds can be broadly categorised as UCITS (undertakings for collective investment in transferable securities) and non-UCITS (or non-harmonised) funds.1 UCITS funds are those that comply with harmonised rules as laid down in the UCITS Directive (85/611/EEC) and are authorised for sale to the retail market. Non-harmonised funds (hereafter referred to collectively as alternative investment funds, or AIF) do not form a homogenous class of investment fund.2 AIF invest in a wide variety of asset types and employ very different investment strategies. Inter alia, hedge funds, private equity funds (which can be broken down further into large buy-out funds, mid-cap investment funds and venture capital funds), infrastructure funds, commodity funds and real estate funds can all be classed as AIF. `Special funds` or `institutional funds`, which exist in many Member States and take various legal forms but are not limited to a specific asset class or investment strategy and can therefore not be attributed to a particular fund type, can also be included in this category. It is these AIF and more specifically the AIFM that form the focus of this impact assessment. As shown in Table 1, over €2 trillion are currently invested in EU-domiciled AIF. Table 1: Breakdown of Non-UCITS funds by category (1) 30/09/2008 31/12/2007 € bn Special/Institutional funds 914 British investment trusts 55 French employees saving funds 76 Luxembourg other funds (part 2) 84 Real-estate funds 213 Other 166 Sub-Total 1,508 Sub-Total incl. Ireland 1,663 Hedge funds 566 Total 2,229 Share € bn 41% 945 2% 79 3% 85 4% 102 10% 208 7% 170 68% 1,589 75% 1,696 25% 100% % chg (2) -3.3% -30.8% -10.6% -17.7% 2.6% -2.6% -5.1% -4.9% (1) Excluding Ireland for which no data breakdown is available. (2) End September 2008 compared to end 2007. Source: EFAMA for non-UCITS; Morningstar for Hedge funds (various reporting dates, mainly in Q4 2008). 1 A glossary of technical terms and acronyms can be found in Annex I, references are provided in Annex XII. 2 Categories of non-harmonised funds (non-UCITS) can be found in Annex II EN 4 EN ... - tailieumienphi.vn