BETA

89 Amendments of Olle SCHMIDT related to 2009/0064(COD)

Proposal for a directive
Recital 5

(5) The scope of this Directive should be confined to the management of collective investment undertakings which raise capital from a number of investors with a view to investing it in accordance with a defined investment policy ~~on the principle of risk-spreading~~ for the benefit of those investors. This Directive should not apply to the management of pension funds or managers of non-pooled investments such as endowments, sovereign wealth funds, central banks or assets hoeld on own account by credit institutions, pension funds, or insurance or reinsurance undertakings. This Directive should also not apply to the management of collective investment undertakings which are authorised in accordance with national law and only marketed in their home Member State. This Directive should neither apply to actively managed investments in the form of securities, such as certificates, managed futures, or index- linked bonds. It should, however, cover managers of all collective investment undertakings which are not required to be authorised as UCITS. Investment firms authorised under Directive 2004/39/EC on Markets in Financial Instruments should not be required to obtain an authorisation under this Directive in order to market units or shares of an AIF or to provide investment services in respect of AIF. Investment firms can however only market the units or shares of an AIF or provide investment services in respect of AIF, if and to the extent the units or shares thereof can be marketed in accordance with this Directive. This Directive should not apply to industrial holding companies having their shares traded on an EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy.

2010/02/12
Committee: ECON

Proposal for a directive
Recital 6

(6) In order to avoid imposing excessive or disproportionate requirements, this Directive provides for an exemption for AIFM where the cumulative AIF under management fall below a threshold of EUR 1500 million. The activities of the AIFM concerned are unlikely to have significant consequences for financial stability or market efficiency. For AIFM which only manage unleveraged AIF and do not grant investors redemption rights during a period of five years a specific threshold of EUR 51 000 million applies. This specific threshold is justified by the fact that managers of unleveraged funds, specialised in long term investments, are even less likely to cause systemic risks. Furthermore, the five years lock-up of investors eliminates liquidity risks. AIFM which are exempt from this Directive should continue to be subject to any relevant national legislation. They should however be allowed to be treated as AIFM subject to the opt-in procedure foreseen by this Directive.

2010/02/12
Committee: ECON

Proposal for a directive
Recital 10

(10) In order to ensure a high level of protection of clients of investment firms within the meaning of Directive 2004/39/EC, AIF should not be considered as non-complex financial instruments for the purposes of that Directive. That Directive should therefore be amended accordingly.deleted

2010/02/12
Committee: ECON

Proposal for a directive
Recital 19

(19) AIFM should also be able to market AIF domiciled in third countries to professional investors both in the home Member State of the AIFM and in other Member States. That right should be subject to notification procedures and the existence of a tax agreement with the third country concerned which ensures an efficient exchange of information with the tax authorities in the domicile of the Community investors. Given the fact that such AIF and the third country in which they are domiciled have to meet additional requirements, some of which first have to be laid down in implementing measures, the rights granted under the Directive to market AIF domiciled in third countries to professional investors should only become effective three years after the transposition period. In the meantime Member States may allow or continue to allow AIFM to market AIF domiciled in third countries to professional investors on their territory subject to national law. During this period of three years, AIFM can however not market such AIF to professional investors in other Member States on the basis of rights granted under this DirectiveMember States should be able to allow or to continue to allow AIFM to market AIF domiciled in third countries to professional investors on their territory subject to national law.

2010/02/12
Committee: ECON

Proposal for a directive
Recital 20

(20) It is appropriate to allow the AIFM to delegate administrative tasks to an entity established in a third country provided that necessary safeguards are in place. Similarly, a depositary may delegate some of its depositary tasks in respect of AIF domiciled in a third country to a depositary domiciled in that third country, provided that the legislation of that third country ensures a level of protection of investor interests which is equivalent to that in the ~~Community~~Union. Under certain conditions, it should also be possible for the AIFM to appoint a~~n independent~~ valuator established in a third country.

2010/02/12
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 2 – paragraph 1 – subparagraph 1 – point a

(a) whether the AIF is ~~domicil~~established inside or outside of the ~~Community~~Union;

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point a

(a) AIFM which either ~~directly or indirectly through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding,~~ manage portfolios of AIF whose total assets under management, including any assets acquired through use of leverage, in total do not exceed a threshold of 1EUR 500 million ~~Euro or 500 millions euros when the~~or EUR 1 billion when the portfolio of AIF consists of holdings that (a) are not leveraged and (b) do not have redemption rights exercisable during a period of 5 years following the date of constitution of the AIF. For the purposes of calculating such thresholds: (i) portfolios of AIF ~~consists of~~managed by the AIFM or the management of which is delegated by the AIFM to an undertaking in the same group as the AIFM shall be aggregated; (ii) in relation to AIF that (a) are not leveraged; and ~~with no~~(b) do not have redemption rights exercisable during a period of 5 years following the date of constitution of ~~each~~the AIF, the thresholds shall be applied to the total of the investors’ commitments to the AIF; .

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point a

(a) AIFM which either directly or indirectly through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding, manage portfolios of AIF whose assets under management, including any assets acquired through use of leverage, in total do not exceed a threshold of 1EUR 500 million ~~Euro or 500 millions euros~~or EUR 1 billion when the portfolio of AIF consists of AIF that are not leveraged and ~~with~~have no redemption rights exercisable during a period of 5 years following the date of ~~constitution of each AIF~~initial investment in each AIF, such AIFM shall however be subject to registration in their home Member States;

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point e

(e) an institution~~s which are covered by~~ falling under Article 2 (1) of Directive 2003/41/EC of the European Parliament and the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision, including as it is applied by Article 3 of Directive 2003/41/EC, but excluding any institution within Article 2(2)(b) of Directive 2003/41/EC. In determining for the purposes of this Directive whether an institution is within Article 2(1) of Directive 2003/41/EC, any disapplication of the Directive by a Member State under Article 5 of Directive 2003/41/EC shall be ignored;

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 2 – paragraph 2 – point g a (new)

(ga) AIFM managing Private Equity funds or closed-ended funds;

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point g b (new)

(gb) management companies authorised according to national law which provide management services to nationally regulated collective investment undertakings which are only marketed in their home Member State;

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point g c (new)

(gc) nationally regulated collective investment undertakings which are only marketed in their home Member State;

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point g d (new)

(gd) AIFM which provide management services exclusively for their parent undertakings, for their subsidiaries or for other subsidiaries of their parent undertakings;

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 2 – paragraph 2 – subparagraph 1 – point ge (new)

(ge) internally-managed companies which do not grant their shareholders any redemption or repurchase rights, invest for the longer term predominantly in transferable securities, use no or only limited leverage, and have their shares traded on an EU regulated market.

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point g f (new)

(gf) employee participation schemes.

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – point g u (new)

(gu) Industrial holding companies having their shares traded on an EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy;

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 2 – paragraph 2 – point g x (new)

(gx) Internally-managed companies which do not grant their shareholders any redemption or repurchase rights, invest for the longer term predominantly in transferable securities, use no or only limited leverage and have their shares traded on an EU regulated market;

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 c (new)

2c. For non-systemically relevant AIFM only Articles 6a, 19 to 21 and 40 to 44 of this Directive apply.

2010/02/15
Committee: ECON

Proposal for a directive
Article 2 – paragraph 3

3. Member States shall ensure that AIFM not reaching the threshold set out in paragraph 2(a) or excluded in accordance with paragraph 2(j) are entitled to be treated as AIFM falling under the scope of this Directive.

2010/02/15
Committee: ECON

Proposal for a directive
Article 3 – point a a (new)

(aa) ‘non-systemically relevant AIFM’ means AIFM which either directly or indirectly through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding, manage portfolios of AIF whose individual assets under management, including any assets acquired through use of leverage, do not exceed EUR 100 million and in total do not exceed a threshold of EUR 500 millions or whose total assets under management do not exceed EUR 1 billion when the portfolio of AIF consists of AIF that are not leveraged and with no redemption rights exercisable during a period of 5 years following the date of constitution of each AIF;

2010/02/15
Committee: ECON

Proposal for a directive
Article 3 – point e

(e) ‘Marketing’ means any ~~general~~direct or indirect offering or placement ~~of units or shares in an AIF to or with investors domiciled in the Community, regardless of at whose initiative the offer or placement takes place~~, at the initiative of the AIFM or on behalf of the AIFM, of shares or units in an AIF that it manages to or with investors domiciled in the Union;

2010/02/15
Committee: ECON

Proposal for a directive
Article 3 – point o g (new)

(og)’safe-keeping’ means holding financial instruments in custody or through position-keeping on behalf of the AIF;

2010/02/15
Committee: ECON

Proposal for a directive
Article 3 – point o h (new)

(oh) ‘industrial holding company’ means a company the business purpose of which is to carry out an industrial business strategy through its subsidiaries or associated companies and which is not established for the main purpose of generating returns for its investors by means of divestment of its subsidiaries or associated companies within a planned timeframe;

2010/02/15
Committee: ECON

Proposal for a directive
Article 3 – point o i (new)

(oi) ‘associated company’ means a company in which an industrial holding company, through direct or indirect ownership, holds 20% or more of the voting rights.

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 – paragraph 1

1. Member States shall ensure that no AIFM covered by this Directive provides management services to any AIF or markets shares or units thereof without prior authorisation. Entities which are neither authorised in accordance with this Directive nor, in case of AIFM not covered by this Directive, in accordance with the national law of a Member State, shall not be allowed to provide management services to AIF or market units or shares thereof within the Communitywithout prior authorisation.

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 – paragraph 2 – subparagraph 2

~~An AIFM may hold an authorisation pursuant to this Directive and be authorised as a management or investment company pursuant to Directive 2009/…/EC – [UCITS Directive]~~deleted

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 – paragraph 2 – subparagraph 2 a (new)

Articles 4 to 8 shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 – paragraph 2 a (new)

2a. A management or investment company pursuant to Directive 2009/65/EC shall be deemed as authorised also for the purpose of this Directive, and shall be allowed to manage nationally regulated collective investment undertakings not covered by Directive 2009/65/EC. When managing AIF, a management or investment company pursuant to Directive 2009/65/EC shall comply with the provisions of this Directive.

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 – paragraph 2 b (new)

2b.Without prejudice to Article 18, Member States shall ensure that each AIF falling under the scope of this Directive shall have a single AIFM, which shall be responsible for compliance with the requirements of this Directive.

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 – paragraph 2 d (new)

2d. Depending on their legal form, AIF may be internally managed or may appoint an external manager. Where an AIF has not designated an external manager as AIFM, the AIF itself shall be the AIFM.

2010/02/15
Committee: ECON

Proposal for a directive
Article 4 a (new)

Article 4a Authorised activities 1. Member States shall require that no externally appointed AIFM covered by this Directive shall engage in activities other than the management of one or more AIF in accordance with this Directive, with the exception of the services referred to in points 2 and 3 of the Annex, activities related to the underlying assets of AIF or to the issue and redemption of units or shares in the AIF, of additional management of UCITS pursuant to authorisation under Directive 2009/65/EC, and of services according to Article 6(2) of Directive 2009/65/EC for which the AIFM is authorised. 2. Member States shall require that no internally managed AIF covered by this Directive shall engage in activities other than the internal management activities of that AIFM referred to in points 2 and 3 of the Annex and activities related to the underlying assets of that AIF or to the issue and redemption of units or shares in the AIF. 3. By way of derogation from paragraph 1, Member States may authorise an externally appointed AIFM to provide, in addition to the activities listed in paragraph 1, the following services: (a) management of portfolios of investments and activities related to the underlying assets of these portfolios, including those owned by pension funds and institutions for occupational retirement provision in accordance with Article 19(1) of Directive 2003/41/EC, in accordance with mandates given by investors on a discretionary, client-by- client basis; and (b) as non-core services: (i) reception and transmission of orders in relation to AIFs; (ii) investment advice concerning one or more of the instruments listed in Annex I, Section C to Directive 2004/39/EC; (iii) safekeeping and administration in relation to AIFs, including related services such as cash/collateral management. 4. AIFM shall not be authorised under this Directive to provide only the services referred to in paragraph 3, or to provide non-core services without being authorised for the services referred to in point (a) of paragraph 3, or to provide only the activities referred to in points 2 and 3 of the Annex. 5. Article 2(2) and Articles 12, 13 and 19 of Directive 2004/39/EC shall apply to the provision by AIFM of the services referred to in paragraph 3 of this Article.

2010/02/15
Committee: ECON

Proposal for a directive
Article 10 – paragraph 3 a (new)

3a. This article shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 11 – paragraph 4

4. In the case of AIFM which engage in short selling when investing on behalf of one or more AIF, Member States shall ensure that the AIFM operates procedures which provide it with access to the securities or other financial instruments at the date when the AIFM committed to deliver them, and that the AIFM implements a risk management procedure which allows the risks associated with the delivery of short sold securities or other financial instruments to be adequately managed.deleted

2010/02/15
Committee: ECON

Proposal for a directive
Article 11 – paragraph 5

5. The Commission shall adopt implementing measures further specifying the following: (a) the risk management requirements to be employed by AIFM as a function of the risks which the AIFM incurs on behalf of the AIF that it manages; (b) any arrangements needed to enable AIFM to manage the particular risks associated with short selling transactions, including any relevant restrictions that might be needed to protect the AIF from undue risk exposures. Those measures, designed to amend non- essential elements of this Directive by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 49(3).deleted

2010/02/15
Committee: ECON

Proposal for a directive
Article 12 – paragraph 3 a (new)

3a. This article shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 12 – paragraph 3 b (new)

3b. This article shall not apply to AIFM managing AIF that are not leveraged and with no redemption rights exercisable during a period of 5 years following the date of constitution of each AIF nor to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph -1 (new)

-1. Member States shall require that an AIFM which is an internally managed AIF has an initial capital of at least EUR 300 000.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 1

~~AIFM shall have own funds of at least EUR 125 000~~1. Member States shall require that an AIFM which is appointed as external manager of one or more AIF has an initial capital of at least EUR 125 000, taking into account the following paragraphs.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 2

2. Where the value of the portfolios of AIF managed by the AIFM exceeds EUR 250 million, the AIFM shall provide an additional amount of own funds~~; that additional amount of own funds shall be~~, equal to 0.,02 % of the amount by which the value of the portfolios of the AIFM exceeds EUR 250 million; the required total initial capital and the additional amount shall not, however, exceed EUR 10 million.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 3

Irrespective of the amount of the requirements set out in the first and second subparagraphs, the own funds of the AIFM shall never be less than the amount required under Article 21 of Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast).deleted

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 4

4. For the purposes of ~~the first, second and third subparagraphs the following portfolios shall be deemed to be the portfolios of the AIFM: (a) any AIF portfolios~~paragraph 2, AIF managed by the AIFM, including AIF for which the AIFM has delegated one or more functions in accordance with Article 18~~; (b) any~~ but excluding AIF portfolios that the AIFM is managing under delegation, shall be deemed to be the portfolios of the AIFM.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 4 a (new)

4a. Member States may authorise AIFM not to provide up to 50 % of the additional amount of own funds referred to in paragraph 2 if they benefit from a guarantee of the same amount given by a credit institution or an insurance undertaking which has its registered office in a Member State, or in a third country where it is subject to prudential rules considered by the competent authorities as equivalent to those laid down in Union law.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 4 b (new)

4b. Paragraphs - 1, 1, 2, 4 and 4a shall not apply to AIFM not reaching the threshold of EUR 500 million set out in Article 2a(1)(a), which opt in as AIFM falling under the scope of this Directive, when only managing AIF which: (a) are not leveraged at the level of the AIF; (b) have no redemption rights exercisable during a period of five years following the date of initial investment in each AIF; and (c) in accordance with their investment strategy and objectives, make investments and divestments infrequently. The Member States shall require that an AIFM which fulfils the conditions set out in the first subparagraph has an initial capital of at least EUR 50 000.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 4 c (new)

4c. This Article shall apply neither to AIFM managing funds that are non- leveraged and with no redemption rights exercisable during a period of five years following the date of constitution of each AIF insofar as they make private equity investments, nor to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 4 d (new)

4d. This Article shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 14 – paragraph 4 e (new)

4e. This Article shall not apply to management companies authorised under Directive 2009/65/EC which also manage AIF.

2010/02/15
Committee: ECON

Proposal for a directive
Article 16 – paragraph 1 – subparagraph 1

1. The AIFM shall ~~ensure th~~, where appropriate, ~~for each AIF that it manages, a valuator is appointed which is~~ensure the functional independentce of the ~~AIFM to establish the value of assets acquired by the AIF and the value of the shares and un~~valuation function and the portfolio management function in view of the nature, scale and complexitsy of ~~the AIF~~each AIF that it manages.

2010/02/15
Committee: ECON

Proposal for a directive
Article 16 – paragraph 1 – subparagraph 2

The ~~valuator~~AIFM shall ensure that ~~the assets, shares and units are valued at least once a year, and each time shares or units of the AIF are issued or redeemed if this is more frequent~~, for each AIF that it manages, appropriate and consistent procedures are established so that the proper valuation of the assets of the AIF can be performed and the value of the shares or units of the AIF can be calculated and, where appropriate, published.

2010/02/15
Committee: ECON

Proposal for a directive
Article 16 – paragraph 4 a (new)

4a. This Article shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 – introductory part

1. For each AIF it manages, the AIFM shall ensure that a single depositary is appointed to fulfil, where relevant, the following ~~task~~functions:

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 – point a

(a) ~~receive all payments made by investors when subscribing~~ holds in deposit cash accounits o~~r shares of an AIF manag~~pened byin the ~~AIFM and book them on behalf of the AIFM in a segregated account~~books of the depositary;

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 – point b

(b) safe-keep any financial instruments which belong to the AIF, namely: (i) holding in custody all financial instruments that can be credited into securities accounts. For this purpose, the depositary appointed by the AIFM shall ensure the segregation of assets through the opening of separate accounts in its books in the name of the AIF. Notwithstanding this principle, Member States may allow segregation in so-called ‘omnibus accounts’, provided that each fund’s assets can be clearly identified as belonging to a given AIF at any moment; (ii) maintain the records to verify the ownership of financial instruments that cannot be held in custody based on the information provided by the AIFM, including external evidence of the existence of the transaction;

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 – point c

(c) ~~verify whether the AIF~~ maintain the record t~~he AIFM on behalf of the AIF has obtained~~o evidence the ownership of ~~all~~ other assets by the AIF ~~invests in~~based on information provided by the AIFM or otherwise.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 a – introductory part (new)

1a. In addition to the functions referred to in paragraph 1 (a) and (b), the depositary shall where relevant verify on an ex post basis that:

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 a (new) – point a (new)

(a) the sale, issue, re-purchase, redemption and cancellation of shares or units effected on behalf of an AIF are carried out in accordance with the applicable national law and the AIF rules;

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 a – point b (new)

(b) the value of units is calculated in accordance with the applicable national law and the AIF rules;

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 a – point c (new)

(c) the instructions of the AIFM are carried out, unless they conflict with the applicable national law or the AIF rules;

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 a – point d (new)

(d) in transactions involving an AIF's assets any consideration is remitted to it within the usual time limits;

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 a – point e (new)

(e) the AIF's income is applied in accordance with the applicable national law and the AIF rules.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 b (new)

1b. Member States shall require AIFMs, on receiving any AIF funds, promptly to place those funds into one or more accounts opened with any of the following: (a) a central bank; (b) a credit institution authorised in accordance with Directive 2006/48/EC; (c) a bank authorised in a third country; (d) a qualifying money market fund. The first subparagraph shall not apply to a credit institution authorised under Directive 2006/48/EC in relation to deposits within the meaning of that Directive held by that institution.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 c (new)

1c. For the purposes of point (d) of paragraph 1b and of Article 17 paragraph 1e a “qualifying money market fund” means a collective investment undertaking authorised under Directive 2009/65/EC, or which is subject to supervision and, if applicable, authorised by an authority under the national law of a Member State, and which satisfies the following conditions: (a) its primary investment objective must be to maintain the net asset value of the undertaking either constant at par (net of earnings), or at the value of the investors initial capital plus earnings; (b) it must, with a view to achieving that primary investment objective, invest exclusively in high quality money market instruments with a maturity or residual maturity of no more than 397 days, or regular yield adjustments consistent with such a maturity, and with a weighted average maturity of 60 days. It may also achieve this objective by investing on an ancillary basis in deposits with credit institutions; (c) it must provide liquidity through same day or next day settlement. For the purposes of point (b) of the first subparagraph, a money market instrument shall be considered to be of high quality if it has been awarded the highest available credit rating by each competent rating agency which has rated that instrument. An instrument that is not rated by any competent rating agency shall not be considered to be of high quality. For the purposes of the second subparagraph, a rating agency shall be considered to be competent if it issues credit ratings in respect of money market funds regularly and on a professional basis and is an eligible ECAI within the meaning of Article 81(1) of Directive 2006/48/EC.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 d (new)

1d. Member States shall require that, where AIFMs do not deposit client funds with a central bank, they exercise all due skill, care and diligence in the selection, appointment and periodic review of the credit institution, bank or money market fund where the funds are placed and the arrangements for the holding of those funds. Member States shall ensure, in particular, that AIFMs take into account the expertise and market reputation of such institutions or money market funds with a view to ensuring the protection of AIF's rights, as well as any legal or regulatory requirements or market practices related to the holding of client funds that could adversely affect AIF's rights. Member States shall ensure that the placement of the funds of an AIF in a qualifying money market fund shall only be permitted if provided for in the investment policy and strategy disclosed to investors in the AIF.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 e (new)

1e. Member States shall require that, for the purposes of safeguarding AIF's rights in relation to financial instruments and funds belonging to them, AIFM's comply with the following requirements: (a) keep such records and accounts as are necessary to enable them at any time and without delay to distinguish assets held for one client from assets held for any other client, and from their own assets; (b) maintain their records and accounts in a way that ensures their accuracy, and in particular their correspondence to the financial instruments and funds held for AIFs; (c) conduct, on a regular basis, reconciliations between their internal accounts and records and those of any third parties by whom those assets are held; (d) take the necessary steps to ensure that any client financial instruments deposited with a third party in accordance with Article 17b are identifiable separately from the financial instruments belonging to the AIFM and from financial instruments belonging to that third party, by means of differently titled accounts on the books of the third party or other equivalent measures that achieve the same level of protection; (e) take the necessary steps to ensure that client funds deposited in accordance with Article 17 in a central bank, a credit institution or a bank authorised in a third country or a qualifying money market fund are held in an account or accounts identified separately from any accounts used to hold funds belonging to the investment firm; (f) introduce adequate organisational arrangements to minimise the risk of the loss or diminution of client assets, or of rights in connection with those assets, as a result of misuse of the assets, fraud, poor administration, inadequate recordkeeping or negligence.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 f (new)

1f. If, for reasons of the applicable law, including in particular the law relating to property or insolvency, the arrangements made by AIFMs in compliance with paragraph 1e to safeguard AIF's rights are not sufficient to satisfy the requirements that: (a) AIFM shall when holding financial instruments belonging to an AIF make adequate arrangements so as to safeguard the AIF’s ownership rights especially in the event of the AIFM’s insolvency and to prevent the use of an AIF’s instruments on own account, except where the rules or instruments of incorporation or formation permit such use; and (b) AIFM shall when holding funds belonging to an AIF make adequate arrangements to safeguard the AIF’s rights and, except in the case of credit institutions, prevent the use of client funds for its own account, Member States shall prescribe the measures that AIFMs must take in order to comply with those obligations.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 1 g (new)

1g. If the applicable law of the jurisdiction in which the client funds or financial instruments are held prevents AIFMs from complying with points (d) or (e) of paragraph 1e, Member States shall prescribe requirements which have an equivalent effect in terms of safeguarding AIF's rights.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 2 – subparagraph 1

2. An AIFM shall not act as depositary of an AIF of which it is the AIFM.

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 17 – paragraph 3

3. The depositary shall be either: (a) a credit institution having its registered office in the Community and be authorised in accordance with Directive 2006/48/EC ~~of the European Parliament and Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast).~~;

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 17 – paragraph 3 – point a a (new)

(aa) an investment firm authorised in accordance with Directive 2004/39/EC to also provide the ancillary service of safe- keeping and administration of financial instruments for the account of clients in accordance with Section B(1) of Annex I to that Directive, having its registered office in the Union;

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 17 – paragraph 3 – point a e (new)

(ae) a legal person which is authorised by the competent authorities of the home Member State of the AIFM to act as a depositary, which is subject to prudential regulation and ongoing supervision and which can provide sufficient financial and professional guarantees to be able to effectively perform the relevant depositary functions and meet the commitments inherent to those functions; or

2010/02/15
Committee: ECON

Olle SCHMIDT, Carl HAGLUND

Proposal for a directive
Article 17 – paragraph 3 – point a k (new)

(ak) an entity which carries out depositary functions as part of professional or business activities in respect of which it is subject to mandatory professional registration recognised by law or to legal or regulatory provisions or rules of professional conduct and which can provide sufficient financial and professional guarantees to be able to effectively perform the relevant depositary functions and meet the commitments inherent to those functions.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 3 f (new)

3f. Member States shall permit AIFM to deposit financial instruments held by them on behalf of AIF they manage into an account or accounts opened with a third party, provided that the firms exercise all due skill, care and diligence in the selection, appointment and periodic review of such third party and of the arrangements for the holding and safekeeping of those financial instruments. In particular, Member States shall require AIFM to take into account the expertise and market reputation of that third party as well as any legal requirements or market practices related to the holding of those financial instruments that could adversely affect AIF rights.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 3 g (new)

3g. Member States shall ensure that, if the safekeeping of financial instruments for the account of another person is subject to a specific regulation and supervision in a jurisdiction where an investment firm proposes to deposit client financial instruments with a third party, the investment firm does not deposit those financial instruments in that jurisdiction with a third party which is not subject to such regulation and supervision.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 3 h (new)

3h. Member States shall ensure that AIFM do not deposit financial instruments held on behalf of AIF with a third party in a third country that does not regulate the holding and safekeeping of financial instruments for the account of another person, unless one of the following conditions is met: (a) the nature of the financial instruments or of the investment services connected with those instruments requires them to be deposited with a third party in that third country; (b) where the financial instruments are held on behalf of a professional client, that client requests the firm in writing to deposit them with a third party in that third country.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 4

4. Depositaries may delegate their tasks ~~to other depositaries~~, apart from functions of monitoring and oversight over their sub-custodians. A depositary shall not delegate its functions to the extent that it becomes a letter-box entity.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 5 – subparagraph 2 d (new)

In the event of loss of financial instruments which the depositary holds in custody as referred to in paragraph 1 (b), the depositary shall return the assets to the AIF without undue delay. The depositary can discharge itself of its own liability if it can prove that it has performed its due diligence duties as referred to in paragraph 4.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 5 – subparagraph 2 k (new)

In the event of loss of financial instruments for which it is liable in accordance with this paragraph, where a contract exists that allows for the transfer to a third party selected by the AIFM and re-use of assets by the third party with prior consent from the AIFM, the depositary can discharge itself of its own liability in accordance with the terms of the contract. Investors shall be informed of the existence of the contract. The depositary shall not be liable for any act or omission by (or insolvency of) any Central Securities Depositary (CSD).

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 5 – subparagraph 3 c (new)

The depositary's liability towards AIFM and investors shall not be affected by the fact that it has delegated a part of its tasks to an authorised third party which it has selected.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 5 c (new)

5c. This article shall not apply to closed- ended funds with no redemption rights.

2010/02/15
Committee: ECON

Proposal for a directive
Article 17 – paragraph 5 d (new)

5d. This article shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/15
Committee: ECON

Proposal for a directive
Article 18 – paragraph 1 – subparagraph 3

No delegation of portfolio management shall be given to the depositary~~, the valuator,~~ or to any ~~other~~ undertaking whose interests may conflict with those of the AIF ~~or its investors.~~ unless those conflicts can be managed.

2010/02/16
Committee: ECON

Proposal for a directive
Article 18 – paragraph 3

~~3. The third party may not sub-delegate any of the functions delegated to it.~~deleted

2010/02/16
Committee: ECON

Proposal for a directive
Article 20 – paragraph 3 a (new)

3a. This article shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/16
Committee: ECON

Proposal for a directive
Article 21 – paragraph 1 – subparagraph 2

It shall provide aggregated information on the main instruments in which it is trading, markets of which it is a member or where it actively trades, and on the principal trading exposures and most important resulting concentrations of each of the AIF it manages.

2010/02/16
Committee: ECON

Proposal for a directive
Article 21 – paragraph 2 – introductory part

2. For each AIF an AIFM manages~~, it~~ and in respect of which redemption rights are exercisable, the AIFM shall periodically report the following to the competent authorities of its home Member State:

2010/02/16
Committee: ECON

Proposal for a directive
Article 21 – paragraph 4 a (new)

4a. Article 21 shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as they hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and which are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/02/16
Committee: ECON

Proposal for a directive
Article 21 – paragraph 4 b (new)

4b. Article 21 shall not apply to closed- ended funds with no redemption rights.

2010/02/16
Committee: ECON

Proposal for a directive
Article 22

Article 22 Scope This section shall apply only to AIFM which manage one or more AIF employing high levels of leverage on a systematic basis. AIFM shall assess on a quarterly basis whether the AIF employs high levels of leverage on a systematic basis and shall inform the competent authorities accordingly. For the purposes of the second subparagraph, an AIF shall be deemed to employ high levels of leverage on a systematic basis where the combined leverage from all sources exceeds the value of the equity capital of the AIF in two out of the past four quarters.deleted

2010/03/08
Committee: ECON

Proposal for a directive
Article 26 – paragraph 2 a (new)

2a. Articles 28 to 30 shall not apply to industrial holding companies having their shares traded on a EU regulated market insofar as those companies hold shares in their subsidiaries or associated companies for the purpose of carrying out an industrial business strategy and are not established for the main purpose of generating returns for its investors by means of divestment within a planned timeframe.

2010/03/08
Committee: ECON

Wolf KLINZ, Olle SCHMIDT, Carl HAGLUND, Dirk STERCKX

Proposal for a directive
–

The European Parliament rejects the Commission proposal.

2010/02/25
Committee: ECON