The EU Parliament’s stamp of approval this week sends the AIFM directive back to EU finance ministers who are expected to formally approve the compromise text on behalf of the Council.
They will meet either next week or in early December.
The private equity industry breathed a sigh of relief when the controversial “passport” rules were agreed on, which allow non-EU funds to market to EU member states.
However, there’s a lot more to the new rules. Are you prepared?
The relatively esoteric private equity industry will have to comply with new rules on fund transparency which will include new reporting requirements both before investors commit and thereafter. Funds will have to submit to regulators and investors, among other things, the total amount of any leverage used by a fund, investment strategy, and any preferential treatment of fund investors.
GPs will also be subject to new restrictions on the amount of capital they can distribute following the takeover of a non-listed or public company. In the first two years following an acquisition, fund managers must use their “best efforts” in preventing “distribution, capital reduction, share redemption and/or acquisition of own shares by the company”.
The passport has been granted, and that’s great for non-EU funds. But, is your firm prepared for the host of other rules?