About a-team Marketing Services
The knowledge platform for the financial technology industry

A-Team Insight Blogs

AIFM Level 1 Directive Still Not Fit for Purpose in Spite of Delay, say Kinetic Partners

Subscribe to our newsletter

Level 1 of the AIFM Directive, which was due to be published in Q1 2011, was finally published by the EU on 27th May. It was hoped that the delay was an indication of the level of improvements that were needed and that the final published text would have addressed all the deficiencies present in the previous drafts. This was not the case. Andrew Lowin, Director in Regulation and Risk, from financial services consultancy Kinetic Partners comments:

“The delay in AIFMD’s publication has been wasted; there are still significant deficiencies in level 1 of the AIFM Directive and currently it is still not fit for purpose. What is now clear is that the deadline for implementation of level 1 is 16 June 2013. This also means that, if ESMA were to endorse them, that third country passports would have to be implemented in member states by 16 June 2015 and Private Placement Legislation repealed by 16 June 2018.

There is, however, a grey area over the issue of third country passports with no one making positive recommendations towards them for fear that they become a ‘poison chalice’. Level 1 does not address the issue of third country passports, leaving it for ESMA to deal with it in level 2 – they may also brush over it. If this is the case, Private Placement Legislation will remain at the member states’ discretion and the AIFM Directive will not have the power to repeal it.

In short, whilst we welcome finalisation of the AIFM level 1 directive, Kinetic Partners believes that many of the major issues have been side-stepped and that a lot of ground will have to be made up in level 2.”

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Post-Trade Transformation: Automating Clearing & Settlement

Date: 1 December 2026 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes The UK, EU and Swiss markets move to T+1 settlement on 11 October 2027, but the first binding compression arrives almost a year earlier. ESMA’s amended settlement discipline RTS expects allocation and confirmation completed by 23:00 CET on trade...

BLOG

From Interpretation to Scalable Application: What Year Two of the NAIC Principles-Based Bond Update Has Revealed

By Kate Lee, Global Head of Enterprise Regulatory Data, Bloomberg. Insurers have now spent much of 2026 applying the National Association of Insurance Commissioners’ (NAIC) principles-based bond definition through its second reporting cycle and are quickly approaching year three of implementation. This rule was introduced to modernize statutory bond classification, replacing an approach that leaned...

EVENT

RegTech Summit New York

Now in its 10th year, the RegTech Summit in New York will bring together the RegTech ecosystem to explore how the North American capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

AI in Capital Markets Handbook 2026

AI adoption in capital markets has moved into a more disciplined phase. The priority is now controlled deployment: where AI can be used safely, where it can deliver measurable value, and how outputs can be governed, monitored and evidenced. The 2026 edition of the AI in Capital Markets Handbook examines how AI is being applied...