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 VIII
Competent authorities
SECTION 1: DESIGNATION, POWERS AND REDRESS PROCEDURES
Article 40
Designation of competent authorities
Member States shall designate the competent authorities which are to
carry out the duties
provided for in this Directive.
Where a Member State designates several competent authorities it
shall inform the
Commission thereof, indicating any division of duties.
Article 41
Powers of competent authorities
1. Competent authorities shall be given all supervisory and
investigatory powers that
are necessary for the exercise of their functions. Such powers shall
be exercised in
any of the following ways:
(a) directly;
(b) in collaboration with other authorities;
(c) under their responsibility by delegation to entities to which
tasks have been
delegated;
(d) by application to the competent judicial authorities.
2. The competent authorities shall have at least the following
powers of investigation:
(a) have access to any document in any form and to receive a copy of
it;
(b) require information from any person and if necessary to summon
and question
a person with a view to obtaining information;
(c) carry out on-site inspections with or without prior
announcements;
(d) require records of telephone and data traffic.
Article 42
Supervisory powers
1. The home Member State shall ensure that the competent authorities
may take the
following measures:
(a) impose a temporary prohibition of professional activity;
(b) take appropriate measures to ensure that
Alternative Investment Fund Managers (AIFM) continue to comply
with the
relevant legislation;
(c) refer matters for criminal prosecution to the competent
jurisdictions.
2. Member States shall ensure that the competent authorities have
the powers necessary
to take all measures required in order to ensure the orderly
functioning of markets in
those cases where the activity of one or more AIF in the market for
a financial
instrument could jeopardise the orderly functioning of that market.
Article 43
Administrative sanctions
1. Without prejudice to the procedures for the withdrawal of
authorisation or to the
right of Member States to impose criminal sanctions, Member States
shall ensure, in
conformity with their national law, that the appropriate
administrative measures can
be taken or administrative sanctions be imposed against the persons
responsible
where the provisions adopted in the implementation of this Directive
have not been
complied with.
Member States shall ensure that these measures are
effective,
proportionate and dissuasive.
2. Member States shall provide that the competent authority may
disclose to the public
any measure or sanction that will be imposed for infringement of the
provisions
adopted in the implementation of this Directive, unless such
disclosure would
seriously jeopardise the financial markets or cause disproportionate
damage to the
parties involved.
Article 44
Right of appeal
Member States shall provide that any decision taken under laws,
regulations or administrative
provisions adopted in accordance with this Directive is properly
reasoned, communicated to
the addressee, and is the subject of the right of appeal to the
courts.
That right to appeal to the courts shall apply also where, in
respect of an application for
authorisation which provides all the information required, no
decision is taken within two
months of the submission of the application.
SECTION 2
CO-OPERATION BETWEEN DIFFERENT COMPETENT AUTHORITIES
Article 45
Obligation to co-operate
1. The competent authorities of the Member States shall co-operate
with each other
whenever necessary for the purpose of carrying out their duties
under this Directive
or of exercising their powers under this Directive or under national
law.
2. Member States shall facilitate the co-operation provided for in
this section.
3. Competent authorities shall use their powers for the purpose of
co-operation, even in
cases where the conduct under investigation does not constitute an
infringement of
any regulation in force in that Member State.
4. The competent authorities of the Member States shall immediately
supply one
another with the information required for the purposes of carrying
out their duties
under this Directive.
5. The Commission shall, in accordance with the procedure referred
to in Article 49(2),
adopt implementing measures relating to the procedures for exchange
of information
between competent authorities.
Article 46
Exchange of information relating to the potential systemic
consequences of AIFM activity
1. The competent authorities responsible for the authorisation and
supervision of AIFM
under this Directive shall communicate information to the competent
authorities of
other Member States where this is relevant for monitoring and
responding to the
potential implications of the activities of individual AIFM or AIFM
collectively for
the stability of systemically relevant financial institutions and
the orderly functioning
of markets on which AIFM are active.
The Committee of European
Securities
Regulators (CESR) established by Commission Decision 2009/77/EC of
23 January
200925 shall also be informed and shall forward this information to
the competent
authorities of the other Member States.
2. Aggregated information relating to the activities of
Alternative Investment Fund Managers (AIFM) under
its responsibility
shall be communicated on a quarterly basis by the competent
authority of the AIFM
to the Economic and Financial Committee established by Article
114(2) of the EC
Treaty.
3. The Commission shall adopt implementing measures specifying the
modalities,
content and frequency of the information to be exchanged pursuant to
paragraph 1.
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 47
Co-operation in supervisory activities
1. The competent authorities of one Member State may request the
co-operation of the
competent authorities of another Member State in a supervisory
activity or for an on the
spot verification or in an investigation on the territory of the
latter within the
framework of their powers pursuant to this Directive.
Where a competent authority receives a request with respect to an
on-the-spot
verification or an investigation, it shall perform one of the
following:
(a) carry out the verification or investigation itself;
(b) allow the requesting authority to carry out the verification or
investigation;
(c) allow auditors or experts to carry out the verification or
investigation.
2. In the case referred to in paragraph 1(a) the competent authority
of the Member State
which has requested co-operation, may ask that members of its own
personnel assist
the personnel carrying out the verification or investigation.
The
verification or
investigation shall, however, be the subject of the overall control
of the Member
State on whose territory it is conducted.
In the case referred to in paragraph 1(b) the competent authority of
the Member State
on whose territory the verification or investigation is carried out
may request that
members of its own personnel assist the personnel carrying out the
verification or
investigation.
3. Competent authorities may refuse to exchange information or to
act on a request for
co-operation in carrying out an investigation or on-the-spot
verification only in the
following cases:
(a) an investigation, on-the-spot verification or exchange of
information might
adversely affect the sovereignty, security or public order of the
Member State
addressed;
(b) judicial proceedings have already been initiated in respect of
the same actions
and the same persons before the authorities of the Member State
addressed;
(c) final judgment has already been delivered in the Member State
addressed in
respect of the same persons and the same actions.
The competent authorities shall inform the requesting competent
authorities of any
decision taken under the first subparagraph, stating the reasons
therefore.
4. The Commission shall adopt implementing measures concerning
procedures for on the
spot verifications and investigations.
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 48
Mediation
1. The Committee of European Securities Regulators (CESR) shall
establish a
mediation mechanism.
2. In case of disagreement between competent authorities on an
assessment, action or
omission of one of the competent authorities concerned under this
Directive,
competent authorities shall refer the matter to the CESR, where
discussion will take
place in order to reach a rapid and effective solution.
The
competent authorities shall
duly consider the advice of the CESR.
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