Despite EU-level regulators remaining silent on whether or not such charges are allowed by member states, GPs authorised under the Alternative Investment Fund Managers Directive (AIFMD) will be hit with marketing fees when entering some European countries.
Austria and France will be charging such registration fees, according to legal sources.
France’s regulator, the L’Autorité des marchés financiers, and Austria's securities regulator, the Austrian Financial Market Authority (FMA), did not respond for requests for comment by press time.
Under the directive, compliant GPs are permitted to freely market throughout Europe without having to register or obtain a license with individual national securities regulators.
However fund of funds manager SL Capital, which is authorised under the directive, said that the FMA charged it a one-off registration fee and an ongoing annual fee for every fund under management.
SL Capital's chief operating officer, Ian Harris, said that although the fees were relatively modest, in the region of €1000, he argued it could become a burden if other regulators across the EU did the same.
Harris added having to pay a direct fee to a national regulator defeats the purpose of the directive's passport marketing feature, which was designed to streamline GPs' registration and reporting administrative burdens to just one regulator.
“It is unclear legally if there is anything to prevent that as it is ultimately national law that prevails and the directive just instructs member states on what laws they have to transpose,” said Harris
Legal sources believe the issue is open to debate as the directive does not explicitly permit nor deny national regulators to charge marketing-related fees.
One EU private equity lawyer said the fee is being charged to keep Austria’s AIFMD regime consistent with UCITs (the EU directive covering open-ended funds) which allows for a registration fee.