Definition of AIFMD

AIFMD stands for the Alternative Investment Fund Managers' Directive. The AIFMD is one of a package of measures drawn up by the European Commission after the 2008/9 financial crisis to regulate financial services. It aims to establish a harmonised regulatory framework for monitoring and supervising the perceived risks posed by unregulated alternative investment funds such as private equity and hedge funds. Rather than regulate the funds themselves, however, the directive targets their fund managers.

The AIFMD includes requirements for authorisation, or at the very least registration, of the fund manager, conduct of business (including fair treatment of investors, conflicts of interest and disclosure requirements), regulatory capital, safekeeping of investments, marketing and leverage.

The AIFMD was published in July 2011 and was set to be implemented by in July 2013. In July 2014 a transitional period would end after which all relevant managers would have to be able to prove compliance. 

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