ESMA has agreed a Memorandum of Understanding (“MoU”) with the Brazilian Comissão de Valores Mobiliários (“CVM”) for the supervision of alternative investments funds (“AIFs”), including hedge funds, private equity funds and real estate funds.  The MoU will apply in respect of Brazilian alternative investment fund mangers (“AIFMs”) that manage or market AIFs in the EU and to EU AIFMs that manage or market AIFs in Brazil.

The cooperation arrangements include the exchange of information, cross-border on-site visits and mutual assistance in the enforcement of the respective supervisory laws.  Under the terms of AIFMD, from July 2013 AIFMs from non-EU countries whose securities regulator does not have such cooperation arrangements in place will not be permitted to market or manage AIFs in the EU.

The content of the MoU follows IOSCO’s 2010 Principles regarding Cross-Border Supervisory Co-operation. ESMA has confirmed that the MoU with CVM is consistent with the Regulation implementing AIFMD, which the European Commission adopted in December 2012, and does not pre-empt the EU Parliament and Council’s right to object to that Regulation.

ESMA recently finalised a further MoU with Switzerland and is working with financial market supervisory authorities from other non-EU States to conclude similar co-operation arrangements by July 2013.