FUND 3.5 Investment in securitisation positions

This section applies to a full-scope UK AIFM of:

1. (1)

   a UK AIF;

2. (2)

   an EEA AIF; and

3. (3)

   a non-EEA AIF.

To ensure cross-sectoral consistency and remove misalignment between the interests of firms that repackage loans into tradable securities and originators within the meaning of article 4(41) of the BCD and AIFMs that invest in those securities or other financial instruments, the AIFMD level 2 regulation sets out:

1. (1)

   requirements that must be met by the originator, the sponsor or the original lender, for an AIFM to be allowed to invest on behalf of the AIF in securities or other financial instruments of this type issued after 1 January 2011; and

2. (2)

   qualitative requirements that must be met by AIFMs which invest in these securities or other financial instruments on behalf of the AIF.

[Note: article 17 of AIFMD]

Articles 50 to 56 of the AIFMD level 2 regulation provide detailed rules supplementing the provisions in AIFMD on investment in securitisation positions.