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Distribution - a new step for third countries but not the end of the road

31 July 2015

Distribution - a new step for third countries but not the end of the road

On 30 July 2015, ESMA (European Securities and Markets Authority) published its advice to the European Parliament, the EU Council and the EU Commission (EU Institutions) on the application of the AIFMD passport to non-EU AIFMs and AIFs.

The next step will be the approval of this extension by the EU Institutions.

New step...

As foreseen, ESMA took the position of a jurisdiction by jurisdiction assessment for its first piece of advice. ESMA analysed 6 jurisdictions (the United States of America, Guernsey, Jersey, Singapore, Switzerland and Hong Kong).

However, ESMA confirmed that all of the non-EU countries which were considered as relevant for the purposes of the AIFMD passport extension, will be subject to further assessment. It is interesting to note that some important jurisdictions were not included such as the Cayman and the BVI.

The outcome was not equal for all jurisdictions. Switzerland (provided certain updates yet to come), Jersey and Guernsey have received a positive assessment which means that ESMA considers that there will be no obstacles for the extension of the EU passport.

It is however a different story for Hong Kong, Singapore and the United States of America for which ESMA did not make a final assessment, mentioning different issues at this stage, which will result in a delay in obtaining potential access to the EU passport.

...but not the end of the road

Now the next step will be to obtain approval from the EU Institutions. Once the approval is obtained, one question will be, is the time and transitional period for the passport for a third country really operational? The final question is, will the first three jurisdictions be approved or will the EU Institutions wait until there are more countries which receive positive advice from ESMA?

In conclusion, even if the road is full of questions, it is open for new challenges.

For more information regarding ESMA advice, please click here.

This article was written by David Louis. For more information please contact David on +352 26 48 68 87 or