The Financial Conduct Authority has issued new advice to UK investment managers with respect to the timing of their variation of permission (VoP) applications to become authorised Alternative Investment Fund Managers (AIFM) under the AIFMD. Previously managers were under the impression that, whilst the 22 July 2014 is the date by which all managers must be in compliance with the AIFMD following the transitional year, they had until 22 July 2014 to apply to become AIFMs.
The FCA has now stated that a firm relying on the UK’s transitional arrangements under the AIFMD that wishes to become a ‘full-scope UK AIFM’ must have its new FCA permissions in place by 22 July 2014 at the latest.
To be certain of achieving this deadline, the FCA advises firms to file their VoP applications by 22 January 2014 since the FCA may need a full six months to determine the application.
The FCA also notes that the latest date for applications in order to be authorised by 22 July 2014 is three months before the end of the transitional arrangements, 22 April 2014. It is important to note that the FCA’s time limit for determining such applications extends to six months where it considers the application to be incomplete in any respect. From 22 July 2014, the activity of managing an AIF may not be carried on by any person who is neither authorised to perform that activity nor registered. An authorised person, who carries on a regulated activity without the relevant Part 4A permission, will be in breach of section 20 of FSMA. The FCA note that if it receives applications after 22 April 2014, they would not be obliged to determine them before 22 July 2014.
Managers that need to comply with the depositary-lite regime of the AIFMD, i.e. those that intend to market their non-EU funds to EU investors through private placement, will need to identify their depositary-lite providers, and a summary of the due diligence performed on these providers, in their VoP applications.
To read the full FCA update click here.
