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Why AIFMD reporting after Brexit shouldn’t be a problem for UK AIFMs

Why AIFMD reporting after Brexit shouldn’t be a problem for UK AIFMs

After Brexit and the end of the “Implementation Period”, UK firms lost their financial services passport rights to EU Member States. UK Alternative Investment Fund Managers (AIFMs) who continue to market their funds (AIFs) in EU Member States, will now need to report into each jurisdiction under the Alternative Investment Fund Managers Directive (AIFMD).

The fundamental change in regime: AIFMs need to adapt to the local approach in each jurisdiction

With the financial services passport, UK firms were granted domestic market access in certain areas of financial services. The financial services passport was based on the principle of equivalence, meaning it enabled UK firms to comply in countries where they are based because the regimes are equivalent in outcome. This no longer applies as of January 2021: UK and EU financial services institutions no longer have free access to each other’s market as they did prior to the Brexit Implementation Period. Therefore, UK firms will need to adapt to the local approach within each jurisdiction. This loss of passporting rights will have an impact on both UK and EU firms across various sectors and financial services.

How UK AIFMs can continue their financial services in 2021 within the EU Member States

As UK AIFMs are no longer able to use the AIFMD domestic marketing or passport regimes, they will now need to register their funds into the EU Member States. In order to do so, UK AIFMs need to follow the NPPR (national private placement regime) to obtain approval for marketing their funds in the relevant EU Member State.

The reporting obligation for UK AIFMs that continue their financial services in EU Member States

UK AIFMs that want to continue their marketing activities in EU Member States will need to report into each jurisdiction where the AIF is active.

How UK AIFMs can easily report into multiple EU jurisdictions under AIFMD

AIFMD reporting into multiple jurisdictions is considered challenging because each National Competent Authority (NCA) has their own requirements on how the AIFMD reports should be formatted and how it should be submitted. This means that the fund manager or Fund Administrator will need to prepare and file a different XML reports for each jurisdiction. In order to help fund managers and Fund Administrators to set up their reporting efficiently, we have made an easy-to-use AIFMD reporting template in which you can link all your fund data and link it to multiple jurisdictions. Our software then lets you export the correct AIFMD reporting XML for each jurisdiction, enabling you to report into multiple jurisdictions from one single data stream.

About Matterhorn

Matterhorn Reporting Services is a RegTech company helping financial organizations to meet the challenges of an increasingly complex international regulatory environment. We do this by offering our Regulatory Reporting Hub (RegHub) applications that streamline and simplify your compliance and reporting obligations.

Our knowledgeable consultants constantly monitor the evolution of the different regulations and ensure our applications are always kept up-to-date.

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