Marketing within the European Union : challenges and opportunities for alternative investment fund managers

Abstract

With the aim to provide an internal market for Alternative Investment Fund Managers, protect investors and address the risks associated with the activities of Alternative Investment Fund Managers, the Alternative Investment Fund Managers Directive addressed a regulatory void which has shaped the alternative investment landscape. The study focuses on one activity permitted under this framework namely the marketing of units or shares of Alternative Investment Funds in the European Union. This activity requires ongoing attention by Alternative Investment Fund Managers, in view of its dynamic and ever-changing circumstances; both form a regulatory aspect as well as an operational and strategic perspective. In particular, the study examines the challenges and opportunities for Alternative Investment Fund Managers, generated by the current legal and regulatory framework. It analyses the challenges and opportunities relative to the market process requirements through a comparative study of the interpretation of the parameters set within the Directive in the definition of the term marketing‘. Moreover, it delves into the market access framework provided within the Directive which regulates the cross-border distribution of Alternative Investment Funds in the European Union, granting opportunities to Alternative Investment Fund Managers to raise capital and simultaneously generating challenges in view of the regulatory requirements imposed on Alternative Investment Fund Managers. The study also highlights the opportunities and challenges faced by Maltese Alternative Investment Fund Managers in the context of the local legal and regulatory framework, as well as the approach adopted by the local competent authority. It transpires that the main challenge in this context is to navigate through and assimilate all the relevant obligations and requirements, which are scattered across different subsidiary legislation, rulebooks and regulatory guidance. Therefore, the author collates answers to questions in order to assist Maltese Alternative Investment Fund Managers with the emanating responsibilities.