Print this article
National Tax Laws May Trip Up AIFMD
Sandra Kilhof
25 July 2013
The European Union's controversial
Alternative Investment Fund Managers Directive came into force on
22 July yet complying with national laws is already proving to be a
hassle, figures in the Nordic fund management industry say. The directive sets out detailed rules on matters such as transparency,
how businesses are run, leverage and financial reporting. Such EU-based
fund managers must also appoint an independent custodian for each
alternative investment fund they manage, and have independent risk
management and valuation functions. There have been fears that non-EU jurisdictions, such as
the Cayman Islands – a major hedge fund hub – could face hurdles in
selling into the EU market. The benefits of has supported the AIFMD, stating that a regulated
market for alternative investments would create much-needed competition between
complying countries. Similarly, the directive could cause issues for those
choosing not to comply. In this
respect, Danish tax laws might become a serious hindrance to compliance, the
federation said in a statement. “We
find it crucial that AIFMD be supported by relevant measures implemented by the
Danish government, so that investment managers can enjoy the advantages of the
directive. Currently, Danish tax laws are curtailing the import and export of
investments. We want the politicians to take responsibility for creating a free
market by removing these unnecessary laws.” As
such, the federation has come up with three amendments to Danish law, which
could provide international investors with easy access to the Danish
alternative investments market. However, at present, the Danish government has
not been willing to amend national tax laws in order to accommodate the
federation’s suggestions. Similarly, the Swedish government is still
proposing ways in which the AIFMD can be made compatible with Swedish law,
without compromising the benefits of the directive. Again, tax laws are the key
issue at hand, with no outlook for a solution any time soon, said the Swedish
Investment Fund Association. Meanwhile, many managers and other
industry players are still uncertain about which actions to take in order to
meet the needs of the new EU regulations. Read more about this latest survey
and the AIFM Directive here.