On July 22, 2013, the Alternative Investment Fund Managers Directive (“AIFMD”) is due to be implemented in every member state in the European Union.  One of the most immediate areas where the AIFMD will have an impact on the activities of U.S. asset managers is through the changes that the AIFMD applies to private placement rules throughout the European Union.

In this alert, we answer some key questions that will help U.S. asset managers prepare for the changes in regulation, which are imminent.

Nothing is changing, right?

Unfortunately not. The AIFMD mandates that each European Union member state makes changes to its private placement rules, so that no alternative investment fund can be privately placed in their country, unless:

• certain mandatory disclosures are made to investors in the marketing documentation, prior to investment
• the fund in question produces an annual report that is compliant with the requirements of the AIFMD
• the manager of the relevant fund reports on a periodic basis to the regulator in each EU member state where the fund is marketed
• there are appropriate cooperation agreements in place between both the domicile where the manager of the fund is located and the domicile of the fund itself on the one hand, and the individual European Union member state in which marketing is proposed to be undertaken on the other.

These requirements mean that each EU member state ought to be making changes to their private placement rules to introduce these requirements with effect from July 22, 2013.  In addition, some EU member states are also taking this as an opportunity to review their existing private placement regimes and introduce further restrictions on the marketing of alternative investment funds in their jurisdiction.

The full memo can be accessed here.