Alternative Investment Fund Managers Directive (AIFMD) - Financial Conduct Authority

Alternative Investment Fund Managers Directive (AIFMD)

Last Modified: 28/01/2015
The Alternative Investment Fund Managers Directive (AIFMD) was published in the Official Journal of the European Union on 1 July 2011 and was transposed into UK law on 22 July 2013.

Alternative investment fund managers should see our information on AIFMD reporting and see our FAQs on AIFMD reporting and using Gabriel.

The scope of the AIFMD is broad and, with a few exceptions, covers the management, administration and marketing of alternative investment funds (AIFs). Its focus is on regulating the Alternative Investment Fund Manager (AIFM) rather than the AIF.  

An AIF is a 'collective investment undertaking' that is not subject to the UCITS regime, and includes hedge funds, private equity funds, retail investment funds, investment companies and real estate funds, among others. The AIFMD establishes an EU-wide harmonised framework for monitoring and supervising risks posed by AIFMs and the AIFs they manage, and for strengthening the internal market in alternative funds. The Directive also includes new requirements for firms acting as a depositary for an AIF.

  • To enhance supervisory practices among EEA competent authorities to support timely and pre-emptive action to prevent market instability and the build-up of systemic risk in the European financial system.
  • To improve investor protection by imposing new depositary standards and enhanced transparency through new investor disclosure rules and mandatory reporting to competent authorities.
  • To foster efficiency and cross-border competition by deregulating national barriers and creating level playing fields through harmonised rules on an EEA-wide passport for full-scope EEA AIFMs to market and manage AIFs from 22 July 2013.

The AIFMD includes requirements for:

  • The authorisation of the fund manager (full scope AIFM) or, alternatively, registration subject to a lighter regime for AIFMs managing AIFs with 'assets under management' below certain thresholds. Sub-threshold AIFMs may not benefit from the AIFMD's marketing and management passports; however, they have the right to opt-in to full authorisation to access AIFMD passports. 
  • Conduct of business (fair treatment of investors, conflicts of interest, remuneration, risk management, valuation, disclosure to investors and regulators).
  • Regulatory capital – initial capital, 'own funds' and professional indemnity insurance requirements.
  • The safekeeping of investments (via the mandatory appointment of depositaries and custodians).
  • Controls over delegation of certain tasks, including portfolio management and risk management.
  • The marketing of AIFs to professional investors within the EEA.
  • The use of leverage by AIFMs for all AIFs under management. EEA regulators will have new powers to intervene, placing restrictions on leverage and other supervisory restrictions where needed to avoid the build-up of systemic risk.

Some of the main changes are that:

  • A number of fund managers in the UK hold a permission to manage investments. It is likely that some of these firms, dependent on business models, will need to be re-authorised under the AIFMD to operate as AIF managers. These may include:
    • MiFID firms carrying out portfolio management and/or risk management for EEA funds that are not UCITS funds or funds located offshore in third-country jurisdictions, such as the US and Cayman Islands; and
    • operators of collective investment schemes that are not UCITS funds carrying out portfolio management and/or risk management in-house.
  • The AIFMD will mean certain fund managers are being regulated for the first time. For example, investment companies that do not employ an external manager will need to be authorised or registered with the FCA under the AIFMD.
  • Depositaries of AIFs will have to comply with new requirements.
  • The AIFMD brings in significant changes to the management/administration of AIFs in the EU and introduces new EU-wide passports for authorised full-scope AIFMs to market and manage AIFs from 22 July 2013.
  • Marketing and management passports will not be available to non-EEA managers of AIFs or to EEA managers in respect of their non-EEA AIFs (this may be adopted from 2015 subject to ESMA reports and Commission delegated acts). Marketing of such funds to professional investors is allowed under national private placement (NPP) regimes. It is envisaged that existing NPP regimes will be phased out after the non-EEA passport regime becomes operational, although not before 2018.

1 July 2011 AIFMD was published in the EU’s Official Journal
14 November 2012 FSA published Part 1 of its consultation on AIFMD (see Publications, below)
1 July 2011 AIFMD was published in the EU’s Official Journal
19 December 2012 The EU published the draft delegated regulation (Level 2 measures)
14 March 2013 FSA published Part 2 of its consultation on AIFMD (see Publications, below)
28 June 2013 FCA publishes Policy Statement on AIFMD
22 July 2013 Deadline for AIFMD to be implemented by EEA Member States. Start of transitional period
22 July 2014 End of transitional period provided for by the Directive. The transitional period allows certain UK AIFMs up to a year to seek the necessary variation of permission, authorisation or registration. It also allows certain non-EEA AIFMs to market AIFs in the UK without being subject to the requirements deriving from AIFMD.

Date Link
March 2014 CP14/4 Quarterly Consultation on Handbook changes affecting AIFMs
February 2014 ESMA’s Questions and Answers on application of the AIFMD
January 2014 Finalised guidance on the AIFM remuneration code
October 2013 ESMA’s final guidelines on reporting obligations
September 2013 CP13/9 sets out FCA’s guidance on remuneration under AIFMD
July 2013 Final regulations published by HM Treasury
July 2013 ESMA Guidelines on sound remuneration policies under the AIFMD
June 2013 PS13/5 Implementation of the Alternative Investment Fund Managers Directive
This sets out our rules for implementing the AIFMD, and provides our response to the feedback to our Consultation Papers. The rules will take effect from 22 July 2013.
May 2013 ESMA guidelines on reporting obligations under Article 3 and Article 24 of the AIFMD
May 2013 Draft regulations published by HM Treasury
May 2013 Transposition of the Alternative Investment Fund Managers Directive: Questions and Answers
The Treasury was asked some questions during the consultation on AIFMD and has published its answers to a number of these
March 2013 FSA CP13/09: Implementation of the AIFMD Part 2
This is our second consultation on rules and guidance to transpose the AIFMD into UK law
March 2013 Transposition of the Alternative Investment Fund Managers Directive: further consultation
January 2013 Transposition of the AIFMD
Treasury consultation paper on the Transposition of the Alternative Investment Fund Managers Directive
November 2012 FSA CP12/32: Implementation of the AIFMD
FSA Consultation Paper on the rules and guidance to transpose the requirements of the Alternative Investment Fund Managers Directive (AIFMD) into UK law

Latest news

We have published a short guide to assist firms with the completion of the marketing passport. This can be found on the UK AIFMs page.


Contact us

If you have any queries relating to AIFMD application then please contact the Customer Contact Centre on 0300 500 0597.

If you have already submitted an application and have a query, or if you would like to submit further information relating to an existing application, please send these to

For any technical AIFMD queries please contact us.