PERG 16.1 Introduction

Question 1.1: What is the purpose of the questions and answers in this chapter?

The purpose is to consider the scope of regulated activities specifically relating to the Alternative Investment Fund Managers Directive 2011/61/EU ("AIFMD") as implemented in the UK through the RAO.

Question 1.2: What are the regulated activities specifically relating to AIFMD?

The regulated activities that specifically relate to AIFMD are:

(1) managing an AIF (see PERG 16.3); and

(2) acting as a depositary of an AIF (see PERG 16.4).

Question 1.3: What are the main European measures dealing with the scope?

As well as AIFMD itself, they are:

(1) Commission delegated regulation (EU) No 231/2013, supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision (the AIFMD level 2 regulation); and

(2) the ESMA document "Guidelines on key concepts of the AIFMD" (the ESMA AIFMD key concepts guidelines).

Question 1.4: What is the approach to deciding whether something is covered by the AIFMD?

When defining what an AIF is, the drafters of AIFMD faced a dilemma. If there is a precise and detailed definition there is a risk that some funds that should be regulated would fall outside regulation, given the wide variety of legal forms they can take. However, a broad definition entails a risk that AIFMD is given a much wider scope than intended. The agreed definition of AIF is drafted at a high level of generality and uses words which have a wide meaning. So we have approached PERG 16 by looking at what sorts of entities are clearly meant to be caught and then using that as a guide to identify cases which are not fairly within the definition, to avoid an interpretation that would give an exorbitantly wide scope. In the same way, descriptions of what is excluded should not be read in a way that would take cases out of scope that are fairly within it.

A number of answers in PERG 16 take a broad purposive interpretation and look at economic substance. The definition of AIF is drafted at a high level without much detail and uses broad concepts rather than precise technical or legal ones, meaning that PERG 16 takes a similar approach to interpreting it.

Question 1.5: Are there transitional arrangements?

Yes. Some of the transitional arrangements for implementing the AIFMD may affect the date by which a person who would otherwise be managing an AIF or acting as a depositary of an AIF needs permission to do so. PERG 16 does not deal with these arrangements. Details are in Part 9 of the AIFMD UK Regulation.