UK regulator the Financial Conduct Authority (FCA) can expect a flood of Alternative Investment Fund Managers Directive (AIFMD) authorization applications in the next four months. More than half of UK fund managers have yet to submit such requests, according to research by regulatory consultancy group Bovill.
The FCA expects to receive 776 total AIFMD authorization requests before the July 22 submission deadline, according to official figures obtain by Bovill. Only 361 firms have submitted an application to date.
Private equity firms that submit AIFMD applications by the July deadline can continue operating even if regulators have not yet approved their request for authorization.
However questions surround AIFMD applications submitted before the July deadline that are later rejected.
“If they don’t approve you, what do you do?” You are acting in an unapproved capacity and we don’t know what the implications of that would be,” said Jon Wilson, a director at regulatory consultancy group Cordium.
The FCA can take up to six months to review an application. An application that takes this long would put a GP beyond the 22 July deadline and “into a risky area if they don’t approve you”, added Wilson. The FCA was unable to respond to a request for comment by press time.
Ashley Kovas, head of funds at Bovill, said GPs need to ensure that by going “hell for leather in getting the application across the line” GPs don’t “miss the point they need to not only apply but comply” with the directive.
However, for UK-based GPs the situation is comparatively rosy. Luxembourg regulator (the CSSF) issued guidance last month requiring all AIFMD applications by April 1 in order to authorize GPs by July.