AIFMD II – Publication of official texts

On March 26, 2024, the final text of AIFMD II was published in the EU Official Journal. The published European directive numbered 2024/927 amends certain parts of the current AIFM Directive (AIFMD) as well as the UCITS Directive.

In December 2023, we briefly outlined the key changes of AIFMD II in a news item. In this item, we will particularly focus on the timelines and strategic decisions that managers of alternative investment funds (AIFs) and managers of UCITS can make in the upcoming period to ensure timely compliance with the amended regulations.

Background and timelines 

Although an evaluation conducted in 2020 indicated that the AIFMD was functioning adequately and its objectives have been achieved, it was decided to make several adjustments to the AIFMD. Additionally, the UCITS Directive is also being amended to better align with similar requirements from the AIFMD.

Following a proposal for amendment of both directives published by the European Commission in November 2021, negotiations have taken place with the European Parliament and the European Council. This resulted in the publication of a compromise text called AIFMD II in November 2023.

The final text of AIFMD II, as published in the EU Official Journal on March 26, 2024, is nearly identical to the compromise text of November 2023. The minor differences only relate to textual elements and the numbering of various (inserted) sections.

As AIFMD II is a European directive, all EU member states are required to adjust their national laws and regulations concerning the requirements for managers of AIFs and UCITS. These adjustments must be made by April 16, 2026, and by that date, all market participants falling under the (amended) regulations must comply. Only the rules relating to (changes in) periodic fund reporting will come into effect a year later.

Implementation phase

 Since the final texts of AIFMD II have only recently been published, it is not expected that lawmakers in the various EU countries will publish proposals for implementation in national legislation in the short term.

However, managers of AIFs and UCITS can already begin to consider several strategic choices.

Interesting considerations for managers of AIFs include:

• Is the manager willing and able to offer any of the newly permitted ancillary services (such as serving securitization special purpose vehicles or overseeing benchmarks), and what actions are necessary to ensure timely compliance with the requirements?
• Does the manager wish to make use of the possibility for AIFs to provide loans, and what impact does the EU Directive on Credit Servicers and Credit Buyers (2021/2167) have on this activity?
• Does the company meet the new requirement of (at least) two full-time directors, or will the composition of the management board need to be adjusted in the coming period?
• What liquidity management tools does the manager of open-end AIFs or UCITS want to use, and what is required to implement these adequately?

To sum up

This news item provides an update on the status of AIFMD II and the strategic questions that managers of AIFs and UCITS may face.

In a previous news item, we already provided an overview of all the major changes that AIFMD II brings. In the coming period, we will delve deeper into some of these changes and the impact they will have on managers of AIFs and UCITS.

If you would like more information on this subject or on other topics related to the AIFMD or UCITS Directive, Projective Group – Risk & Compliance can assist you. Please feel free to contact us.