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EU Directive on Alternative Investment Fund Managers (AIFM)

the European Parliament voted through the Directive on Alternative Investment Fund Managers (AIFM). The Directive aims to create a comprehensive and secure framework for the supervision and prudential oversight of alternative investment fund managers in the EU.The EU itself acknowledges that alternative investments are a global industry and is keen for European investors to have access to the best products and services that the global market has to offer. However, during the drafting of the EU Directive, Switzerland and other non-EU international financial centres were concerned about how the Directive would treat non-EU managers and funds. Switzerland’s concerns about access to the EU market were articulated by various Swiss bodies including the Swiss Bankers Association.The Swiss Bankers Association now welcomes the fact that the Directive allows the possibility for portfolio management for an alternative investment fund established in the EU to be delegated to a Swiss-domiciled financial intermediary provided that the latter is subject to supervision by the Swiss Financial Market Supervisory Authority (FINMA).The Swiss Bankers Association also welcomes the foreseen phased introduction of so-called “third-country passports”. These will allow alternative investment fund managers located outside the EU to market their services and products throughout the EU on the basis of a single authorisation provided they comply with regulatory requirements and transparency standards that are comparable to those applicable to EU fund managers. While the principle is clear, the precise nature of the conditions that Switzerland will have to fulfil and the speed and nature of their implementation remain to be clarified with the EU.)