Talk:Alternative Investment Fund Managers Directive 2011/Archive 2

Proposing new section for AIFMD passport
Hi again, as I mentioned above, I'm working as a consultant to the Managed Funds Association, on whose behalf I'm proposing some updates to this article. I'm returning to propose the addition of a new section to the article which addresses both marketing and the AIFMD passport. These aspects of the AIFMD are currently mentioned briefly in the Overview but aren't explained in detail.

This section will provide specific information on the AIFMD passport and its reception among AIFMs. I've included balanced coverage of EU and non-EU concerns about AIFMD, and a description of how the directive was "sold" to skeptical parties.

Below is the proposed section and markup:

I hope that editors can review this potential addition and provide feedback, or if it is ready to go into the article and seems reasonable to add, make the edits to include this. As I do have a paid conflict of interest here, I will not make any edits myself and prefer that others make such changes they feel are appropriate. If you have any questions at all, please don't hesitate to ask. Thanks, 16912 Rhiannon (Talk · COI) 20:44, 9 June 2015 (UTC)

So far, I noticed the following:
 * Footnote 2 (title= AIFM Directive for US Private Fund Managers) apparently refers to an article that is online but contains no URL or work, so it is not clear what the source is.

The text
 * "The AIFM Directive defines marketing as any offering or placement (sale) of an AIF managed by an AIFM at the initiative of the AIFM, or on behalf of the AIFM, to investors domiciled in the EU."

accurately reflects the cited source but perhaps the wording could be changed slightly, since the directive obviously does not so define the concept of "marketing" (but rather specifies what marketing is covered by the directive); in other words "means" is being used in a special legal sense (as in "within the meaning of the Act"), not in the sense of a (dictionary) definition. Perhaps "For the purposes of the directive, marketing is defined ...".

I don't understand the following text: "The AIFMD does not define many of the key terms used in the definition of marketing." Does it mean that the directive does not explain the terms used in the text
 * "'marketing' means a direct or indirect offering or placement at the initiative of the AIFM or on behalf of the AIFM of units or shares of an AIF it manages to or with investors domiciled or with a registered office in the Union"?

Does it really add anything? Is it meant to explain the following sentence:
 * " Member State laws and rules determine whether an AIF is engaged in marketing for purposes of the Directive."?


 * The following text seems to repeat itself (I have altered the formatting to make this more obvious):
 * An AIF managed by a non-EU AIFM and
 * all AIFs managed by non-EU AIFMs

may currently be marketed only under national private placement regimes". I presume one of the alternatives was supposed to say something else, (e.g "a non-EU AIF managed by an EU AIFM"?).

I don't see exactly how
 * "Three years after deciding to permit the expanded use of the AIFMD passport, the Commission began discussing whether to adopt rules that would require all AIFMs to market their AIFs under the AIFMD passport and terminate the ability of AIFMs to market to EU investors under national private placement regimes.[4][5] "

is supported by the two cited sources, particularly the second. As worded it seems to imply some sort of delay by the Commission, but I don't know if that was intended. Perhaps some rewording and quotes would be appropriate.

I'm not sure of the significance of
 * "Any Commission decisions regarding extending the passport and termination of national private placement regimes may be blocked if the EU Council or the EU Parliament objects to the Commission’s rules.[5]"

or how it is supported by the cited source (ValueWalk). I haven't gone through the source carefully, so a quote might help.

Is the text
 * "In a study conducted by Multifonds in June 2014, 72% of respondents from the EU and Canada said they expected the passport to help them gather assets.[6]"

supported by the cited source? The source states
 * " 72% thought that non-EU managers would setup European operations ... ".

--Boson (talk) 13:04, 30 June 2015 (UTC)
 * Thanks for these notes, Boson, I'm working my way through them and will reply here soon with an updated draft and full response. Your thorough review is much appreciated! 16912 Rhiannon (Talk &middot; COI) 14:35, 1 July 2015 (UTC)


 * Thanks so much for your notes, Boson! I've attempted to address each of them below. I'm also including an updated draft re: your suggestions.


 * I've added the appropriate URL and publishing information into that second footnote. Good catch!
 * I changed the wording regarding the definition of marketing to the phrase you suggested, because I think it's more clear. It's also still supported by the source, which is perfect.
 * The sentence you found confusing, about what the AIFMD does and not define, was not really a notable enough detail to include in the draft. I think you're right, it's a minor observation, and would require a great deal of additional explanation in order to leave it in the draft.
 * I've clarified the phrase "an AIF managed by a non-EU AIFM" so it isn't repetitive.
 * The sentence about the Commission waiting three years to begin discussing the adoption of new rules is intended to accurately describe the timeline of the process. I've reworded the sentence to avoid the suggestion that the Commission caused an undue delay, because stating that was not my intention.
 * As far as the sentence being supported by sources, the Griffith source says "US managers have been slow to adopt AIFMD compliance" and the EurActiv source says "Third-country managers are currently unable to benefit from the passport regime, and must market their funds to European investors under individual national private placement regimes (NPPRs), where they exist." As I said, I've adjusted the sentence according to your note.
 * I eliminated the sentence "Any Commission decisions regarding extending the passport and termination of national private placement regimes may be blocked if the EU Council or the EU Parliament objects to the Commission’s rules."
 * I've adjusted the sentence describing the Multifonds study to be a new, closer rewording of the source.


 * You can view all of my changes, and the mark-up below:


 * Thanks again for the notes, Boson! Let me know if these changes are sufficient. As always, I welcome feedback from other editors who might come across this discussion. If these changes are acceptable, I hope you'll implement them! Thanks, 16912 Rhiannon (Talk &middot; COI) 20:32, 8 July 2015 (UTC)


 * Just a couple of problems, mainly with the second paragraph:
 * I presume the an got left in by mistake in "AIFs managed by an non-EU AIFMs may currently be marketed only under ..."
 * "All EU AIFs may currently be marketed only under national private placement regimes ..."
 * doesn't make sense to me. Should it read
 * "All non-EU AIFs may currently be marketed only under national private placement regimes ..."
 * Apart from that, I found the new version much easier to understand. Because of the mass of abbreviations and the distinctions between the "domicile" of the funds and the managers, however, I wonder if an introductory sentence or some introductory phrases might be helpful, to alert the reader in advance to the distinctions. Or perhaps the general reader would find it more readable if some occurrences of AIF could be replaced by the long form (or "the fund") and similarly some occurrences of "AIFM" were replaced by "the fund manager"). I haven't thought about that in detail, but I did have to concentrate to get the meaning (that may be partly due to the heat, of course).


 * I believe WP:MOS prefers "member state" to be lowercased, though it is capitalized by the EU (following legal conventions that Wikipedia doesn't). That probably also applies to "directive", and to "Non-Cooperative Country and Territory", since we don't normally use capitalization to indicate special meanings (perhaps the latter could use quotation marks, instead).
 * --Boson (talk) 23:20, 8 July 2015 (UTC)


 * I'm going through COI requests from COIN and saw this. The first two paragraphs are fine and I am implementing them.  The third paragraph is WP:CRYSTALBALL and WP:NOTNEWS - we can add something when that is done.  The 4th paragraph is mostly complaining by industry from new regulations which is not a big shocker and in my view, WP:UNDUE. Jytdog (talk) 12:28, 9 July 2015 (UTC)


 * Thank you to both of you for providing all of this feedback and to Jytdog for adding some of the draft into the article! I want to address what you've both said point by point, and make some additional suggestions of my own, so I hope you'll bear with me. In response to each of your points, Boson:


 * I'm glad you're copy-editing through the heat!
 * Thanks for catching that errant "an". That's fixed in the updated draft below now.
 * You're also correct in pointing out that the clause should read, "All non-EU AIFs may currently be marketed only under national private placement regimes," so I've altered that as well.
 * I'm glad you found the text in this version to be a little more clear. I've experimented in this version with spelling out some of the abbreviations. Let me know if you think that helps, or if you think other iterations of "AIF" and "AIFMD" should be rephrased.
 * I've now decapitalized "member state" and "directive" when they appear in the text; I was following the directive and sources on the capitalizations here but can see that conflicts with typical use. I've also included quotations around non-cooperative country and territory.


 * Jytdog, I'm glad you found the first two paragraphs acceptable and were able to add them in. I'm wondering if we could break those two paragraphs you added out into their own section, titled Marketing and the AIFMD passport (or something similar, whatever you think appropriate). If you think the information is best suited to the Overview section, then maybe the article could benefit from a subsection heading, just to break up that big wall of text. Let me know what you think.


 * In regards to the third paragraph of my suggested text, I understand your concerns re:WP:CRYSTALBALL, I'd tried to avoid that with my wording, but I can see why it still veers that way. What I'd like to suggest is a rephrased version focusing on the 2015 consultation which has been launched. Could we possibly include the text as it stands in the revised version?


 * Finally, with regards to the final paragraph, my intention on including this was to add some balance to the article's overall positive discussion of the directive and this commentary appeared typical of similar articles. However, I defer to you and Boson as to whether this seems WP:UNDUE. Boson, what do you think?


 * I invite you both to check out what I've changed below, and use this to update the text added to the article if it looks ok:


 * Thanks again to you both! I look forward to your thoughts on all of this. Once again, thanks, 16912 Rhiannon (Talk &middot; COI) 14:24, 14 July 2015 (UTC)

As I understand the directive, both AIFs and AIFMs can, independently of each other, be domiciled in the EU or outside the EU. So we can theoretically have I am still having problems understanding the following statements:
 * non-EU AIFs managed by EU AIFMs
 * non EU AIFs managed by non-EU AIFMs
 * EU AIFs managed by EU AIFMs
 * EU AIFs managed by non-EU AIFMs.
 * 1) Funds managed by EU managers [ including non-EU AIFs???] may be marketed across the EU under the AIFMD passport ...
 * 2) Funds managed by a non-EU managers may currently be marketed only under national private placement regimes.
 * 3)  All non-EU funds may currently be marketed only under national private placement regimes [''presumably including non-EU AIFs managed by EU AIFMs, which contradicts #1, above– unless "EU" is added there]

Re: 3rd paragraph. Although I understand the crystal-ball concerns, I would, personally, be happy with the suggested text from that point of view, if the ongoing consultations are better documented. At first glance, the cited sources talk about industry groups supporting the "proposed" changes, but they do not really confirm that the EU has already initiated a consultation process. In my view there is a case for adding primary EU sources. Readers might even benefit from a link to the call for evidence but that might be a bit too much nitty gritty.

Re criticism: As regards industry criticism of the legislation, in other articles about the EU, there are sometimes complaints in the other direction, that the EU-critical point of view is under-represented. I, personally, prefer to stick to the facts but I think it can be appropriate to discuss the reception of legislation. In this case, I think the discussion of the legislation's reception could be made more balanced, if only by making it clearer that the criticism is coming from industry lobbyists. Regarding costs, for instance, one of the cited sources has 'Jerome Wigny claims the regulation might end up costing less than anticipated for its implementation. “Partly for lobbying purposes, certain parties were claiming that AIFMD would be so expensive and impractical, but the overall cost is significantly lower than what was expected,” he says.'

Having said that, in COI matters, I would tend to defer to Jytdog, who has more COIN experience.

--Boson (talk) 18:14, 14 July 2015 (UTC)
 * You are doing awesome Boson - the COI is well managed as 16912 Rhiannon is complying perfectly with COI (thanks for that!), and you are having a nice/respectful dialogue with them - thanks for that!  I just wanted to act on what I saw as useable content and respond to what I thought wasn't, so I could move the "edit request" off the to-do list at COIN - especially since you are here working with the editor.   Just to say - 16912 Rhiannon's job here, is to get the content their client wants into WP.  That is not a bad thing; it just is what it is.  You are doing a great job ensuring that any content that goes in, is solid per NPOV and VERIFY and you are free to say "no" to anything that in your judgement doesn't comply.  Thanks for doing working with 16912_Rhiannon. Jytdog (talk) 18:33, 14 July 2015 (UTC)


 * Hey Boson, great points! Thanks for being so thorough. I'll address your concerns point by point:
 * Sorry for any confusion so far, while I was confident in my initial draft, my head was spinning a bit with the EU vs. non-EU funds and fund managers the more I've looked at this, so I took a deep breath and went back to sources. EU funds with EU managers are currently eligible for the passport, so that they can market their AIFs across Europe on the basis of their home state approval. For example, a fund operated out of Ireland can be marketed to investors in France and Germany under the passport, without needing to seek additional approval in each of those states. In all other scenarios, the managers must currently use the national private placement regimes to market their funds. So, that applies to: non-EU managers with EU funds, non-EU managers with non-EU funds, and EU managers with non-EU funds. I've reworked my proposed text to clarify, and I've added in a new source published in 2015 to help support.
 * I agree with your note on the third graf! I've added a couple of new citations to the call for evidence.
 * I think you've made a good point about balancing the depiction of the criticism the legislation has received.
 * Since we've been going back and forth on this a fair bit, I thought it might be more helpful for me to put the draft in my userspace, here. We can both make edits there, as needed. Please do take a look and let me know if the changes I made are sufficient, and if you'd like to update the text in the article. Also, what do you think about breaking this information out as either its own section or as a subsection of the Overview? Thanks again for your focus on this! Also want to say thanks to Jytdog for their great note above. I think with all our input here, we're going to have significantly improved the usefulness and readability of this article! 16912 Rhiannon (Talk &middot; COI) 14:03, 22 July 2015 (UTC)

I think it's OK to go live now, so I have updated the article. There is a bit of industry griping, but that is now put into perspective a bit, and the general conflict between regulators and the financial industry does seem to be notable. There has been quite a lot in the news today about the Dodd-Franks recommendations being implemented, with a lot of discussion about costs etc. It may be appropriate to remove some of it when the dust has settled and we have more of a "historical" perspective. It is definitely an improvement on what was there before you started, and I think it is now very readable. I've made it into a separate section and also made a separate section of the Annex IV requirements (and changed the heading). The structure is easily changed later. Actually, I'm not too keen on "Overview" as a heading. I wonder if we would be better starting with something like "Background" (with the first paragraph) followed by "Content" (?) (with various subsections) and then making a separate "Reception" (?) section with the industry's response/criticism. --Boson (talk) 16:44, 22 July 2015 (UTC)
 * Thanks Boson! I like your idea of renaming Overview to Background and likewise having a Reception section, but I'm less sure about Content. Perhaps a more specific title, like Scope and implementation, would work? Interested to see what you come up with. Meantime, I'll be back soon with some thoughts on the article introduction. Thanks again! 16912 Rhiannon (Talk &middot; COI) 16:22, 23 July 2015 (UTC)
 * I have changed the headings/structure a bit. Still not happy but it's a start. --Boson (talk) 22:09, 23 July 2015 (UTC)

Variety of English and date format
I have just noticed that the article uses British English spelling (e.g. authorisation) but uses US date format. Since it is about the EU, I would tend to use European date format (e.g. "22 July 2013"). Any objections to me standardizing everything to European date format and spelling.? --Boson (talk) 21:20, 4 August 2015 (UTC)


 * Sounds like a good plan. Thanks, Boson! 16912 Rhiannon (Talk &middot; COI) 14:16, 24 August 2015 (UTC)