On 24 May 2023, the European Commission published a legislative proposal which would introduce amendments to the AIFMD on the issue of costs.
The proposal is part of the Commission’s wider work on its Retail Investment Strategy (RIS) – many of the RIS changes relate to MiFID and we will be reporting in detail on those separately.
The amendments also largely follow the recommendations set out in ESMA’s Opinion on which we reported last week (see here).
What is being proposed?
As far as AIFMs are concerned the key items of interest in the Commission’s proposals are contained in what would be a new Article 12(1bis) to the AIFMD.
Who would this affect?
As drafted, the new provisions would very largely be relevant only to EU AIFMs – the vast majority of the changes are to Article 12 of the AIFMD, which does not apply to non-EU AIFMs marketing into the EU under an NPPR.
What are ‘undue costs’?
To risk stating the obvious, an ‘undue’ cost is one that isn’t a due cost.
ESMA’s costs and performance benchmark
ESMA is charged with developing and making public benchmarks which enable the comparative assessment of costs and performance of AIFs.