EU Directive on Alternative Investment Fund Managers (AIFMs)
from the International Association of Hedge
Funds Professionals (IAHFP)
Proposal for a Directive on Alternative Investment Fund Managers
Chapter IV
Transparency requirements
Article 19
Annual report
1. An
Alternative Investment Fund Manager (AIFM) shall, for each of the AIF it manages, make available an
annual report for
each financial year.
The annual report shall be made available to
investors and
competent authorities no later than four months following the end of
the financial
year.
2. The annual report shall at least contain the following:
(a) a balance-sheet or a statement of assets and liabilities;
(b) an income and expenditure account for the financial year;
(c) a report on the activities of the financial year;
3. The accounting information given in the annual report shall be
audited by one or
more persons empowered by law to audit accounts in accordance with
Directive
2006/43/EC of the European Parliament and of the Council of 17 May
2006 on
statutory audits of annual accounts and consolidated accounts,
amending Council
Directives 78/660/EEC and 83/349/EEC and repealing Council Directive
84/253/EEC21. The auditor's report, including any qualifications,
shall be reproduced
in full in the annual report.
4. The Commission shall adopt implementing measures further
specifying the content
and format of the annual report. These measures shall be adapted to
the type of
AIFM to which they apply.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 20
Disclosure to investors
1.
Alternative Investment Fund Managers (AIFM) shall ensure that AIF investors receive the following
information before they
invest in the AIF, as well as any changes thereof:
(a) a description of the investment strategy and objectives of the
AIF, all the assets
which the AIF can invest in and of the techniques it may employ and
of all
associated risks, any applicable investment restrictions, the
circumstances in
which the AIF may use leverage, the types and sources of leverage
permitted
and the associated risks and of any restrictions to the use of
leverage;
(b) a description of the procedures by which the AIF may change its
investment
strategy or investment policy, or both;
(c) a description of the legal implications of the contractual
relationship entered
into for the purpose of investment, including information on
jurisdiction,
applicable law and on the existence, or not, of any legal
instruments providing
for the recognition and enforcement of judgments on the territory
where the
fund is domiciled;
(d) the identity of the AIF's depositary, valuator, auditor and any
other service
providers and a description of their duties and the investors'
rights should any
failure arise;
(e) a description of any delegated management or depositary function
and the
identity of the third party to whom the function has been delegated;
(f) a description of the AIF's valuation procedure and, where
applicable, of the
pricing models for valuing assets, including the methods used in
valuing hard to
value assets;
(g) a description of the AIF's liquidity risk management, including
the redemption both in normal and exceptional circumstances, existing
redemption
arrangements with investors, and how the AIFM ensures a fair
treatment of
investors;
(h) a description of all fees, charges and expenses and of the
maximum amounts
thereof which are directly or indirectly borne by investors;
(i) whenever an investor obtains a preferential treatment or the
right to obtain
preferential treatment, the identity of the investor and a
description of that
preferential treatment;
(j) the latest annual report.
2. For each AIF an AIFM manages, it shall periodically disclose to
investors:
(a) the percentage of the AIF's assets which are subject to special
arrangements
arising from their illiquid nature;
(b) any new arrangements for managing the liquidity of the AIF;
(c) the current risk profile of the AIF and the risk management
systems employed
by the
Alternative Investment Fund Manager (AIFM) to manage these risks.
3. The Commission shall adopt implementing measures further
specifying the
disclosure obligations of AIFM and the frequency of the disclosure
referred to in
paragraph 2.These measures shall be adapted to the type of AIFM to
which they
apply.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
Article 21
Reporting obligations to competent authorities
1.
Alternative Investment Fund Managers (AIFM) shall regularly report to the competent authorities of its
home Member State
on the principal markets and instruments in which it trades on
behalf of the AIF it
manages.
It shall provide aggregated information on the main instruments in
which it is
trading, markets of which it is a member or where it actively
trades, and on the
principal exposures and most important concentrations of each of the
AIF it
manages.
2. For each AIF an AIFM manages, it shall periodically report the
following to the
competent authorities of its home Member State:
(a) the percentage of the AIF's assets which are subject to special
arrangements
arising from their illiquid nature;
(b) any new arrangements for managing the liquidity of the AIF;
(c) the actual risk profile of the AIF and the risk management tools
employed by
the AIFM to manage these risks;
(d) the main categories of assets in which the AIF invested;
(e) where relevant, the use of short selling during the reporting
period.
3. For each of the AIF it manages the AIFM shall submit the
following documents to
the competent authorities of its home Member State:
(a) an annual report of each AIF managed by the AIFM for each
financial year,
within four months from the end of the periods to which it relates;
(b) a detailed list of all AIF which the AIFM manages for the end of
each quarter.
4. The Commission shall adopt implementing measures further
specifying the reporting
obligations referred to in paragraphs 1, 2 and 3 and their
frequency.
Those measures, designed to amend non-essential elements of this
Directive by
supplementing it, shall be adopted in accordance with the regulatory
procedure with
scrutiny referred to in Article 49(3).
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