UK managers in AIFMD logjam

Only about half of GPs’ applications for authorization under the Alternative Investment Fund Managers Directive (AIFMD) have been approved by the UK Financial Conduct Authority by July 22, the directive’s effective date.

Of 1,130 applications sent to the UK regulator, 644 were approved by the deadline date, according to the FCA’s website. Of those remaining, 129 are ready for imminent approval. It is unclear what percentage of applications were sent back to applicants for further clarification or corrections. The FCA was unable to return an immediate request for comment by press time.

Firms stuck in the queue are able to continue marketing to UK investors, but must stop fundraising elsewhere in Europe until the necessary approvals are made. The FCA said the remaining applications are being processed in line with deadlines laid out in the directive, meaning firms who submitted an application by July 22 may have to wait until February 22 before receiving authorization.

“We are required to determine complete applications for authorization as a full-scope UK AIFM within three months or, where we consider it is necessary due to the specific circumstances of the case, within six months,” the FCA said in an email to pfm.

Previously the FCA told pfm that it expects many of the applications to take the full six months as “there are a high volume of applications at the same time” and because the application process is a “fairly rigorous exercise, and can involve lots of detailed discussion and reviews.”

Industry sources have been anticipating the backlog with the understanding that AIFMD approvals are a new area for national regulatory bodies.

Another well-placed source added: “I understand that [national regulatory bodies] have received more applications than they anticipated, as a significant number of fund managers not required to apply for authorization are electing to opt in.”