GPs feeling unprepared for AIFMD reporting

GPs authorized under the EU’s Alternative Investment Fund Managers Directive (AIFMD) will begin sending their “Annex IV” reporting by end of January, but most GPs say they’re not ready to do it, according to a survey by Cordium, a compliance consultancy.

Over half (57 percent) of the 27 EU-based fund managers subject to the directive surveyed said they’ve yet to begin their reporting preparations. Moreover only 30 percent of respondents said they plan to hold a dry run of their procedures for filing the information.

“The Annex IV is a tremendous challenge and people should be getting preparations under way as soon as possible,” said Bobby Johal, a Cordium managing consultant. “Even now for a January deadline is late to be starting,” he told pfm.

“In terms of practical preparations, there is a great deal you can do, despite there being no test site yet. This includes things like getting to grips with what data you’ll need, speaking to your third-party providers, and even reviewing the report on a line by line basis,” said Johal.

Despite the lack of forward planning, 92 percent of fund managers are feeling “concerned” about the reporting deadline.

“The avalanche of regulatory change is causing the slow response – that and regulatory fatigue,” reasoned Johal. “We have recently just had firms getting authorized and going through the application process which would have taken all their time and effort; so now firms are only really waking up to the next challenge which is Annex IV.”

The survey also revealed that 48 percent of GPs feel that allocating enough staff resources and time is the biggest AIFMD reporting challenge, whereas 36 percent said that locating all the data points will prove the biggest stumbling block.

“On the data side there are some data points that have to be specifically sourced for this report so you will need to spend time creating the data as well as sourcing it,” said Johal, who adds that resourcing has been an issue due to the amount of regulatory change the industry is experiencing.

“Historically compliance and regulatory obligations may have been a small function but now it is very much front page news and people are having to throw money, time and resources at getting up to speed and handle all the obligations that fall upon managers.”