Offshore domiciles sign AIFM agreements

Private equity’s major offshore jurisdictions, including Guernsey, Jersey and the Cayman Islands, have signed agreements with most European securities regulators to prepare themselves for the AIFM directive.

European securities regulators have signed agreements with some major offshore fund domiciles, allowing most offshore fund managers to continue marketing in the EU via private placement regimes after the Alternative Investment Fund Managers (AIFM) directive takes effect next week. 

The pan-EU regulatory and fundraising framework requires non-EU jurisdictions to adopt certain provisions or apply regulatory measures equivalent to the directive, which the signed agreements confirm.

Channel Island domicile Guernsey leads the way with 27 signed agreements, including the major European economies of the UK, France and Germany, whereas Jersey, Cayman Islands and the British Virgin Islands have signed 25. 

All jurisdictions have yet to sign agreements with Italy, Slovenia and Spain. Jersey, Cayman Islands and the British Virgin Islands are also awaiting signatures from Austria and Germany.

The agreements take the form of a memorandum of understanding (MoU). The content of the MoU was agreed with pan-European securities regulator the European Securities and Markets Authority (ESMA) back in May.

The MoUs will give both EU and non-EU regulators permission to supervise fund managers that operate on a cross-border basis both within and outside the EU. National regulators will also share information, conduct on-site visits and assist one another in enforcing securities laws.