The “AIFMD II” proposals continue their progress through the EU legislative process with more detail provided, but in many areas specific criteria will not be known until Level 2 measures are developed.

By Nicola Higgs, Jaime O’Connell, Denisa Odendaal, and Dianne Bell

On 9 February 2023, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a report on the amendments it has adopted to the European Commission’s legislative proposal for a directive (the Directive) amending the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD) and Directive 2009/65/EC (UCITS Directive). The proposed new legislation arises out of the Commission’s AIFMD review and the identification of specific areas where the AIFMD framework could be improved, as well as the Commission’s view that a number of those issues were equally relevant for the activities of UCITS. As such, both directives will be amended to better align their requirements.

The European Securities and Markets Authority proposes to restrict ESG- and sustainability-related terms in the naming of funds, with an eye on the US and UK fund naming regimes.

By Paul Davies, Nicola Higgs, Anne Mainwaring, and Dianne Bell

On 18 November 2022, the European Securities and Markets Authority (ESMA) published its consultation paper on guidelines in relation to funds’ names, including quantitative thresholds that would need to be met before ESG- and sustainability-related terminology can be used in funds’ names. The proposed rules would set common standards for AIFMs[1] and UCITS[2] management companies when promoting AIFs and UCITS using an ESG- or sustainability-related name, including when these funds are set up as EuVECA, EuSEF, and ELTIFs[3] to facilitate marketing of funds throughout EU Member States.

The UK government has proposed amendments to the UK PRIIPs regime with performance information in the KID to differ from the EU “performance scenario” requirement.

By Nicola Higgs and Anna Lewis-Martinez

On 30 July 2020, HM Treasury published a policy statement on amendments to the Packaged Retail Investment and Insurance-based Products (PRIIPs) Regulation. The policy statement provides an update on HM Treasury’s previously announced intention to bring forward amendments to the onshored PRIIPs Regulation to improve the functioning of the UK PRIIPs regime.

Industry has widely condemned the PRIIPs standardised disclosure document, known as the Key Information Document (KID), as being potentially misleading to ordinary consumers with regards to the products it is intended to describe. The European Supervisory Authorities carried out a recent review of the KID but failed to agree on proposals to amend it following the outcome of the review, which was published on 20 July 2020.