The Alternative Investment Fund Managers Directive (AIFMD) provides for a lighter regime applicable to small AIFMs.

In order to qualify as a de minimis AIFM, the manager must either directly or indirectly manage portfolios of AIFs whose assets under management (AuM) collectively do not exceed either:

  1. €100m; or
  2. €500m for AIFMs managing only unleveraged AIFs with no redemption rights exercisable within 5 years from the date of initial investment in the AIF.

Once authorised the de minimis AIFM is exempt from complying with the provisions of the AIFMD except for certain reporting requirements to the MFSA in relation to:

  • the investment strategies of the AIFs under management
  • the main instruments in which the AIFs under management are trading; and
  • the principal exposures and most important concentrations of the AIFs under management.

In order to ensure the de minimis AIFM maintains its status at all times, it is required to have procedures in place to monitor the total value of AuM. If the total value of AuM exceeds the prescribed thresholds and the AIFM deems that the situation is not temporary, it is required to apply for an extension to its de minimis licence to a full AIFM licence.

It is also important to note that although an AIFM satisfies the thresholds applicable to a de minimis AIFM, it may nevertheless opt into the AIFMD framework. It would thus be required to comply with all the obligations applicable to full-scope AIFMs, but it would also be able to benefit from the EU passporting rights deriving from the AIFMD which are not applicable to de minimis AIFMs.

For more information or if you have any questions, please feel free to contact Dr Cherise Abela Grech.

Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
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