Private Funds Law Update

Legal news, updates, commentary and opinion on private funds, alternative investments and related areas

The Luxembourg law on reserved alternative investment funds (RAIF) is a welcome addition to the alternative investment funds (AIF) industry and we have seen keen interest from the fund and asset management industry in this new platform. Since its introduction last summer, for the first time in Luxembourg there is the ability to set up a fund that can avail itself of the same advantages (including, crucially, the beneficial tax treatment) available to a regulated…
On 18 July 2016 the European Securities and Markets Authority (ESMA) published its advice to the European Parliament, the Council and the Commission on the application of the Alternative Investment Fund Managers Directive (AIFMD) passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) in twelve non-EU countries: Australia, Bermuda, Canada, Cayman Islands, Guernsey, Hong Kong, Isle of Man, Japan, Jersey, Switzerland, Singapore and the United States. ESMA assessed each country to…
The SBEEA (Part I: People with Significant Control) Against the backdrop of an increasing push for greater transparency of company ownership, the Small Business Enterprise and Employment Act 2015 (“SBEEA“) took effect on 6 April 2016 which implements the beneficial disclosure requirements of the EU Fourth Money Laundering Directive. The SBEEA imposes a requirement on UK companies and LLPs to maintain a register of significant beneficial ownership information and creates a central registry for such…
On 23 July 2015, the UK Treasury published a consultation paper and draft Legislation Reform (Limited Partnership) Order 2015 setting out its proposed amendments to the Limited Partnership Act 1907 (LPA 1907). The proposals were intended to modernise the law on limited partnerships by removing unnecessary legal complexity and administrative burdens to ensure that UK limited partnerships remain the preferred structure for European private equity and venture capital funds, as well as various other types…
We have seen a dramatic increase in interest in hedging FX risk related to investments by private equity funds. The precipitous decline in the value of sterling has caused complications for funds which are in the process of acquiring UK assets. For deals which are still going ahead, many sponsors are using or considering deal contingent FX hedges to protect them against further fluctuations. These products are offered by a small number of banks to…
UK regulated fund managers and asset managers should bear in mind that, while the Brexit vote has occurred, this does not bind the UK Parliament. As of the date of writing (12 July 2016), the process of withdrawal under Article 50 of the Lisbon Treaty has not yet started. Although the timetable for withdrawal under Article 50 limits negotiations to two years, this may be extended by agreement. During this hiatus period, it will be…
The SEC Office of Compliance Inspections and Examinations (“OCIE” or the “Staff”) released its 2016 Exam Priorities recently, as applicable to examined registrants other than national securities exchanges.   Exam Priorities are always a reflection of current trends and news and, in recent years, also reflected the SEC’s expanded capabilities for monitoring market activity through data analytics.   The three key themes and many of the individual focus items for 2016 are much the same as last…
The Government has confirmed that it will be pushing forward with extending the Senior Managers and Certification Regime to all financial services firms (including investment firms and fund managers), following the Fair and Effective Markets Review (FEMR) report’s recommendation (and Mark Carney’s Mansion House speech indication) of the extension of the SMR to fixed income, commodity and currency markets.  The new regime (for insurers, the Senior Insurance Managers and Certification Regime, or SIMR) will come…
EU regulated AIFMs promoting EU domiciled AIFs – We have lived with AIFMD since the full implementation date of 22 July 2014 with the marketing passport being available from that date for EU regulated AIFMs promoting EU domiciled AIFs. The ESMA Opinion – Use of the AIFMD Passport – ESMA published its Opinion on 30 July 2015 on the functioning of the AIFMD passport and national private placement regimes. While the expectation was that there would  be…
For Jersey and Guernsey, the ESMA Advice was positive: no obstacles exist to the extension of the AIFMD passport to these jurisdictions.  AIFMD Article 67 envisages that a delegated act will follow within three months to implement this advice.  However, the time-frame for this now appears to be uncertain. The Advice notes that the Commission are obliged to adopt a delegated act extending the EU passport to non-EU AIFs and non-EU AIFMs within three months…