On 1 October 2013, ESMA published guidelines on the reporting obligations imposed on Alternative Investment Fund Managers (AIFMs) under Articles 3 and 24 of AIFMD. 

The purpose of the guidelines is to ensure common, uniform and consistent application of the reporting obligations by providing clarification on the information that AIFMs must report to relevant national competent authorities (NCAs), the timing of such reporting and the procedures to be followed when AIFMs move from one reporting obligation to another. The guidelines are expected to further facilitate the exchange of information between NCAs by ensuring the standardisation of the format of information sent to the NCAs by AIFMs.

Examples of the information to be provided to NCAs include:

• The specific types of Alternative Investment Funds (AIFs) under management (including feeder AIFs and fund of funds)
• The principal markets and instruments in which the AIFM trades on behalf of each AIF
• The value of assets under management for all AIFs
• The risk profile of the AIFs including market risk, liquidity risk, counterparty risk, borrowing and exposure risk and other operational risks
• The overall level of leverage employed by each AIF under management

NCAs to which the guidelines apply must notify ESMA whether they comply or intend to comply with the guidelines within two months of the date of publication of the official translations of the guidelines by ESMA, giving reasons for non-compliance.  In the absence of a response by this deadline, NCAs will be considered non-compliant. 

ESMA Opinion on the collection of information under AIFMD

In conjunction with the publication of the guidelines, ESMA issued an opinion on the collection of information under AIFMD. Under Article 24.5 of AIFMD, NCAs have the ability to request additional information in order to effectively manage systemic risk.  This additional information is over and above the level of information required under the AIFMs’ standard reporting obligations.  In its opinion, ESMA provides details on the additional information which NCAs could require AIFMs to report on a periodic basis pursuant to Article 24.5.

ESMA considers the following information as relevant for effective monitoring of systemic risk:

• Details of the number of transactions carried out
• Geographical focus, based on the domicile, of investments made
• Details of short positions
• Information on risk measures
• Information on non-EU master AIFs not marketed in the Union

ESMA is of the view that the effective monitoring of systemic risk, which could potentially be caused by one AIFM or a group of AIFMs, would be facilitated by NCAs adopting a common approach when making use of their power to require additional information under Article 24.5.

Contributed by Vincent Coyne