Interactive Data has introduced a compliance solution for the Alternative Investment Fund Managers Directive (AIFMD) that came into force this week, but compliance may not be plain sailing with the Alternative Investment Management Association (AIMA) warning that implementation of the regulation is incomplete.
Interactive Data has pulled together existing data and created new data required by AIFMD and defined by the European Securities and Markets Authority (ESMA) to offer a bespoke compliance service. The service covers the regulation’s requirements around reporting, independent valuations and risk management, with customers selecting the data they need to achieve compliance and a tailored delivery mechanism.
Anthony Belcher, director of EMEA pricing and reference data at Interactive Data, explains a range of readiness for AIFMD among fund managers, saying: “The initial focus was on setting up legal structures and applying for authorisation from regulators. Firms then considered what they needed to do to become compliant and looked at operational solutions. Some are more advanced on the valuations side, which is perhaps the more tangible requirement of the regulation; some have not yet completed the reporting piece, as reporting is not required until early next year; and some large firms already have best practices that meet most of the requirements of the regulation.”
Interactive Data’s compliance solution has already been implemented by a number of existing customers and is being tested by new prospects. Belcher comments: “We are confident that our ESMA defined, AIFMD specific data items, along with our evaluated pricing, reference data and robust analytics, can help firms successfully manage the transition to AIFMD and maintain ongoing compliance.”
While the transition period to AIFMD ended and the regulation came into force on 22 July, 2014, AIMA warns that the directive is incomplete and leaves uncertainty in the market. It notes that a number of European countries have not yet implemented AIFMD, or have not implemented it fully, which is hindering managers’ ability to do business and restricting investors in certain countries from accessing alternative investment funds. Delays in regulatory authorisation of managers in some European countries is also curtailing business and there remains uncertainty about how measures are being interpreted and applied in different countries. In terms of reporting under AIFMD, AIMA says regulatory reporting templates have not yet been finalised, despite reporting requirements taking effect in January 2015.
AIMA CEO Jack Inglis comments: “AIMA has continued to work closely with member states and competent authorities on the outstanding issues relevant to our industry. Unfortunately, as with many pieces of regulatory reform we have seen negotiated and applied in the recent past, AIFMD implementation has proven to be more complex than originally expected, not only for the industry but also for the regulatory community.”