Passport system and third-country managers
The AIFM Directive facilitates a passport system between Member States. The AIFM Directive also applies to non-EU managers that manage EU alternative investment funds or offer units in alternative investment funds to investors established in the EU.
Passport
The Alternative Investment Fund Managers Directive (AIFM) has subjected the activities of alternative investment fund managers to rules that are the same across Europe. This facilitates a passport system between Member States.
An AIFM licence acts as a kind of passport for the manager. The company can then:
• manage an alternative investment fund with its registered office in another Member State;
• offer units in the European alternative investment funds it manages to professional investors in other Member States without having to comply with additional national requirements in those other Member States;
• offer units in the non-European alternative investment funds it manages to professional investors in other Member States without having to comply with additional national requirements in those other Member States. In that case, however, a number of requirements affecting the state where the non-European alternative investment funds have their registered office must be met.
The passport only extends to offering units to professional investors established in other Member States. If an authorised alternative investment fund manager wishes to offer to retail investors in another Member State, it will have to comply with the national requirements imposed on offers to retail investors in that Member State.
Offer to non-professional investors by licensed European investment fund managers
Licensed managers with their registered office in a Member State other than the Netherlands are permitted to offer European investment funds to non-professional investors in the Netherlands. In addition, it is possible to manage or start managing a European investment fund that has historically offered to non-professional investors in the Netherlands and in which those Dutch non-professional investors still participate.
The manager must then comply with the specific requirements that apply in the Netherlands for offering units to non-professional investors (the ‘retail top-up’ as included via Section 4:37p of the Dutch Financial Supervision Act (Wft)).
To this end, parties must go through the following procedure:
1. Passport procedure
The passport procedure by virtue of Article 32 or 33 of the AIFM Directive (Section 2:70(1) of the Dutch Financial Supervision Act (Wft)) must have been completed.2. Inform AFM
The AFM must be informed by mailing a completed retail distribution notification form to notifications.aifmd@afm.nl.Attach to the mail (as an appendix to the retail distribution notification form) a statement signed by the manager in which the manager explicitly states that it meets the requirements applicable in the Netherlands for offering units to non-professional investors (pursuant to Section 4:37p of the Dutch Financial Supervision Act (Wft)).
State in the subject of the email:
• the name of the manager
• the investment fund
• the country of origin.
Investment firms from European former designated states must report to AFM
Since the implementation of the AIFM Directive, only non-European countries have been designated as adequately supervised countries for the regime of Section 2:66 of the Dutch Financial Supervision Act (Wft).The above possibility therefore also applies to investment funds from previously designated European states that were registered with the AFM under the designated states regime before implementation of the AIFM Directive. This is subject to the condition that they have an AIFMD licence from a European regulatory authority. These parties will be removed from the designated states register and must report to the AFM.
Third-country managers
The AIFM Directive also applies to non-EU managers that manage EU alternative investment funds or offer units in alternative investment funds to investors established in the EU.
Reporting obligations
You can find more information about AIFMD reporting on the page with reporting obligations.