Alert August 13, 2013

French Regulator Adopts Stringent AIFMD Regime

EU Member States were obliged to implement the Alternative Investment Fund Managers Directive into their law by July 22nd.  In common with various other states, France is late in implementing the law, and the final version is very different from the initial proposal as we described it here.  For non-EU managers, the position in France is now:

Transitional Provisions

Unlike in most other member states, there will be no transitional exemption for non-EU managers.  This means that the French AIFMD requirements apply now not in July 2014.

Marketing

The marketing of open-ended funds has always been practically impossible in France since it has always been subject to prior authorisation by the French regulator.  This will not change.

The marketing of closed-ended funds is permitted subject to a significantly more stringent AIFMD regime than that which applies in other member states.  We described here the minimum that the directive requires from non-EU managers that wish to market into the EU, but France will also require the fund to appoint a depositary and comply with the other provisions of the directive that otherwise apply only to EU managers including, presumably, the restrictions on remuneration although this is not yet clear.

In practical terms, this now means that the only way to have any dealings with French investors will be through reverse solicitation since this is not considered to be “marketing” and is therefore not subject to the AIFMD.