By: Justin Meagher and Michael Loo
The FCA has recently proposed several notable changes to its Annex IV reporting requirements. The proposed changes include:
- For Full UK AIFMs: Require article 24(2) reporting for all AIFs managed by the AIFM, including those not marketed into the EEA.
- For non-EEA AIFMs: For AIFMs that have a quarterly filing requirement, master AIFs also required to submit an Annex IV report in addition to the feeder AIF already being filed.
If the proposed changes are enacted, the reporting burden on both UK AIFMs and non-EEA AIFMs will increase.
Under the current regime, a non-EEA AIFM is required to submit an Annex IV filing to the FCA only for those AIFs marketed in the UK and as this usually pertains to the Feeder fund, the reporting is less onerous. However, the proposed changes will now require a non-EEA AIFM to include the associated Master AIF of the Feeder AIF. This additional FCA requirement creates a far more complex and burdensome reporting regime.
Managers will need to begin reporting on additional data points including counterparties, borrowings, holdings, exposures, and risk metrics for all associated master AIFs. The one relief for non-EEA AIFMs is that the proposed changes would only impact AIFMs who are currently subject to a quarterly reporting requirement.
The comment period on the aforementioned proposals from the FCA ended on August 12, 2016. It is likely based on feedback received from market participants; the FCA will make a final ruling in the fourth quarter of 2016. To learn more, read the FCA’s recently published consultation paper.
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