Implementation and Scope of the Directive
On June 8, 2011, the European Parliament and the European
Council issued Directive 2011/61/EU on alternative investment fund
managers (the "AIFM Directive"). The AIFM Directive
applies to alternative investment fund managers that manage and/or
market alternative investment funds
("AIFs")—investment funds other than UCITS
funds—in the EU and lays down a set of harmonized rules
regarding authorization, operation, and transparency. The managers
of real estate funds, private equity funds, venture capital funds,
infrastructure funds, and hedge funds fall within the subjects to
whom the provisions of the AIFM Directive apply.The AIFM Directive
governs alternative investment fund managers ("AIFMs")
only and maintains the power to regulate the structure of AIFs and
the supervision of AIFMs at the level of each EU Member
State.
On December 19, 2012, the European Commission issued the
Commission-delegated Regulation (EU) No. 231/2013 (the "AIFM
Regulation"), which implements certain provisions of the AIFM
Directive.1
The deadline for the implementation of the AIFM Directive by each
EU Member State was July 22, 2013, but Italy was not able to
implement the AIFM Directive within that time frame. Regardless,
the Bank of Italy and the CONSOB stated that certain provisions of
the AIFM Directive2 were directly enforceable into
Italy—starting from July 22, 2013—via a joint notice
issued on July 26, 2013.
On July 22, 2013, the AIFM Regulation became effective in each EU
Member State, since the AIFM Regulation did not require any formal
implementation act. On March 4, 2014, Legislative Decree No. 44,
implementing the AIFM Directive into Italy (the "Legislative
Decree"), was issued. 3 The Legislative Decree came
into force on April 9, 2014.
Changes to the Unified Financial Act
The Legislative Decree introduces material changes to the
provisions of the Legislative Decree No. 58 of February 24, 1998
(the "Unified Financial Act") on collective portfolio
management. However, the Legislative Decree incorporates the
general terms of the AIFM Directive only and refers the relevant
technical aspects to a set of level 2 and 3 regulatory measures to
be issued by the Bank of Italy, the CONSOB, and the
Ministry of Economy and
Finance, each within its relevant powers (the
"New Regulations").4
The establishment, management and marketing of Italian AIFs will
continue to be ruled by the current set of Italian level 2 and 3
regulations (the "Current Regulations"), as described
below in greater details, until the New Regulations will be issued
and come into force.
Key News
SICAFs. The Legislative Decree has introduced
the SICAF,5 a new type of closed-ended undertaking for
collective investment incorporated as a company with fixed
capital.
The EU Passport. Through the EU passport, an AIFM
licensed in its home Member State, pursuant to the implementing
regulations of the AIFM Directive of its home Member State, may
manage and/or market AIFs in Member States other than its home
Member State via a passporting of its AIFM Directive's license.
Any marketing activity carried out taking advantage of the EU
passport may be addressed only to professional
investors.
The Registration Procedure. AIFMs managing one or
more AIFs for a total value not exceeding certain thresholds fixed
in advance may benefit from a smooth registration procedure
pursuant to the AIFM Directive rather than applying for an AIFM
Directive license.6 The AIFM Directive granted each EU
Member State with the power to issue stricter provisions in
relation to such AIFMs. It appears that Italy has exercised its
power to provide stricter provisions by introducing: (i) the
authorization procedure for all the Italian AIFMs as a general
rule, regardless of the total value of the portfolios of the AIFs
managed by the AIFMs; and (ii) the registration process, as an
exception to the general authorization procedure, only for Italian
AIFMs incorporated as special joint stock companies
("Società di gestione del risparmio" or
"SGR") and currently managing AIFs that meet the
requirements to qualify as "European funds for venture
capital" and "European social Entrepreneurship
funds" under, respectively, the EU Regulation No. 345/2013 and
the EU Regulation No. 346/2013.
Operation of EU AIFMs within the EU
Existing Italian AIFMs: SGRs.
SGRs managing Italian AIFs 7 are deemed as already
licensed to manage such funds in accordance with the Current
Regulations and can therefore continue to carry out their
management activity. By July 22, 2014, SGRs shall implement the
necessary measures to comply with the provisions implementing the
AIFM Directive and file a notice with the Bank of
Italy.
In their capacity as licensed AIFMs, Italian SGRs may: (i)
establish, manage, and market Italian AIFs in Italy; (ii) establish
and manage Italian AIFs in Italy and market such funds in Italy
and/or in other Member States taking advantage of the EU passport;
and (iii) establish and manage AIFs in a Member State other than
Italy and market such funds in Italy and/or in other Member States
taking advantage of the EU
passport.
Other Existing Italian AIFMs. Italian entities
other than SGRs carrying out collective management of alternative
investment funds services upon the date on which the Legislative
Decree entered into force (e.g., investment companies) may continue
to provide such services, provided that, by July 22, 2014, they
implement all the necessary measures to comply with the provisions
implementing the AIFM Directive and file an application request for
the AIFM Directive's license with the Bank of
Italy.
New Italian AIFMs. Licensing procedures of new
SGRs will continue to be ruled by the Current Regulations until the
New Regulations are issued and enter into force.
EU AIFMs. EU AIFMs licensed in their home EU
Member State pursuant to the relevant provisions implementing the
AIFM Directive may: (i) establish and manage AIFs in their home
Member State and market such funds in their home EU Member State
and/or in other host Member States taking advantage of the EU
passport, including Italy; and (ii) establish, manage, and market
Italian AIFs and market them into Italy and/or into other EU Member
States taking advantage of the EU passport.
Marketing of EU AIFs
Existing Italian AIFs. Italian undertakings for
collective investment reserved to qualified investors and Italian
speculative undertakings for collective investment8 are
to be considered as Italian reserved AIFs pursuant to the
provisions of the Unified Financial Act as amended by the
Legislative Decree.
SGRs may continue marketing the Italian AIFs for which the
fundraising period is still running on the basis of the existing
legal framework until the New Regulations come into force. Starting
from the entry into force of the New Regulations, Italian AIFs may
be marketed only to professional investors and the categories of
nonprofessional investors pointed out under the New
Regulations.
SGRs managing Italian AIFs for which the fundraising period is
still running are to be deemed as licensed to carry out marketing
activities in Italy pursuant to the provisions of the Unified
Financial Act, as amended by the Legislative Decree, and must
implement by July 22, 2014 the necessary measures to comply with
the provisions implementing the AIFM Directive.
New Italian AIFs. The marketing of new Italian
AIFs to Italian investors continues to be ruled by the Current
Regulations. Italian undertakings for collective investment
reserved to qualified investors and Italian speculative
undertakings for collective investments may be marketed only to
professional investors and to the categories of nonprofessional
investors pointed out by the New Regulations, as of the New
Regulations' effective date.
SGRs marketing new AIFs must implement the necessary measures to
comply with the provisions implementing the AIFM Directive by July
22, 2014.
EU AIFs. The marketing of Non-Italian EU AIFs in
Italy authorized before July 22, 2013 may continue to be marketed
to professional investors and investors that subscribe the units of
reserved funds and speculative funds pursuant to the Current
Regulations' effective date. As of the effective date of the
New Regulations, the same requirements described in "New
Italian AIFs" (paragraphs 2 and 3 above) will
apply.
With regard to non-Italian EU AIFs for which a marketing
authorization procedure in Italy is currently pending pursuant to
the former provisions of the Unified Financial Act, the simplified
notification procedure set forth under Article 32 of the AIFM
Directive for the marketing of EU AIFs into a host EU Member State
will apply. Any marketing authorization filed pursuant to the
former provisions of the Unified Financial Act will be deemed as
expired.
This Commentary provides just a preliminary analysis of
some limited aspects relating to the implementation of the AIFM
Directive into Italy. Once the New Regulations have been
implemented, it will be possible to provide a more comprehensive
analysis.
Footnotes
1. In particular, we refer to the provisions on exemptions, general operating conditions, custodians, leverage, transparency, and surveillance.
2. In particular, we make reference to the provisions on the EU passport concerning the marketing of EU AIFs into Italy and the establishment of Italian AIFs by EU AIFMs authorized in their home Member State pursuant to the AIFM Directive. For additional information on the EU passport regime, please refer to "Key News," below.
3. The Legislative Decree was published into the Italian Official Gazette (Gazzetta Ufficiale) on March 25, 2014.
4. The definitions contained under the Unified Financial Act have been amended and a new Title III on collective portfolio management, which replaced the previous Title III, has been added by way of the Legislative Decree.
5. Pursuant to the Unified Financial Act, as amended by the Legislative Decree, SICAF means: "the closed-ended undertaking for collective investment incorporated as a joint stock company (Società per azioni) with fixed corporate capital, having its registered office and its headquarter in Italy, and whose sole object is the collective investment of funds collected through the offering of its own shares and other equity instruments."
6. Article 3 of the AIFM Directive points out that the provisions on registration apply to AIFMs managing: (i) portfolios of AIFs whose managed assets, including any assets acquired through the recourse to leverage, do not exceed the overall threshold of EUR 100,000; and (ii) portfolios of AIFs whose managed assets do not exceed the overall threshold of EUR 500,000, if the portfolio of AIFs consists of AIFs that do not recur to leverage and do not provide reimbursements rights to their investors for a period equal to five years from the date of the initial investment in each AIF.
7. For example, real estate funds and private equity funds.
8. For example, real estate funds and private equity funds.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.