ESMA makes headway on non-EU passport decision

The European Securities and Markets Authority (ESMA) is currently collecting data from member states as it decides whether or not to extend the Alternative Investment Fund Managers Directive (AIFMD) marketing passport to non-EU fund managers.

Speaking at the EFAMA Investment Management Forum last week, ESMA chairman Steven Maijoor said, the regulator is gathering data from individual European regulators on how well the passport and the national private placement regimes are functioning.

“The data relates not only to the extent to which these two mechanisms are being used, but also to more qualitative aspects such as whether investor protection issues have arisen or problems of supervisory cooperation have been detected,” said Maijoor.

“This information will be crucial in helping us make our assessment of the current arrangements and, subsequently, whether we feel that the passport can be extended to entities outside the EU.”

Maijoor added that any decision to extend the passport will not be a blanket acceptance of all non-EU jurisdictions, and ESMA “will not simply say yes, there should be a passport for everyone”.

Rather, ESMA will distinguish between the various non-EU jurisdictions and take into account their efforts to get to a regulatory standard equivalent to the AIFMD.

But, speaking under the condition of anonymity, one senior European policymaker involved writing the Level I text of AIFMD, said he suspected EU officials might introduce additional hurdles for non-EU countries seeking equivalence so as to avoid granting them passports for pan-EU distribution of funds.

ESMA’s input to the European Commission on whether or not the passport should be extended is due July 2015.