The Norwegian Ministry of Finance has recently proposed for Parliament a new law on the management of alternative investment funds.
The proposal implements the estimated future EEA obligations corresponding to the European Parliament and Council Directive 2011/61/EU, referred to as the AIFM Directive (“Alternative Investment Fund Managers Directive”). The AIFM directive provides for an internal market in the EEA for the management of alternative investment funds and marketing of such funds to professional investors. The proposed Norwegian law also regulates the marketing of alternative investment funds to non-professional investors.
In line with the directive, the proposed law contains rules on managers’ access to market alternative investment funds to professional investors. The AIFM directive does not contain rules on the marketing of alternative investment funds to non-professional investors, but each of the EEA countries are free to decide whether they will allow such marketing. In line with the Working Group’s draft and positive comments from most parties consulted, it is proposed that such marketing is permitted, but with requirements for enhanced investor protection through various safeguards.
The managers will, according to the proposed law, be subject to, among other things, licensing obligations, organizational requirements and ongoing requirements for the business. For managers who manage alternative investment funds under certain limits, it is proposed that only the registration requirements and reporting to the FSA, and rules on supervision, shall apply.
“Alternative Investment” includes all forms of collective investment structures that are not traditional transferable securities funds (UCITS). Examples of alternative investment funds are private equity and various investment companies. In addition, national funds, including special funds, which under current law is regulated under the securities funds act, will be regarded as alternative investment funds.
The law will regulate managers of alternative investment funds, not the funds themselves.
The AIFM directive has not yet been incorporated into the EEA Agreement. The reason is that the Directive set out the supranational competence of the EuropeanSecurities and Markets Authority (ESMA). The issues related to supranational competence must be addressed in connection with efforts to incorporate regulations that establish supervisory agencies in the EEA-agreement. In the proposed law there are rules implementing the estimated future EEA obligations corresponding to the AIFM directive, but no proposals for legislation on ESMA competence.
The proposed law is based on the report and draft legislation from a working group appointed by the FSA and comments from the consultation bodies, and implies that managers of a number of collective investment structures that are not currently subject to special regulation, are regulated. In addition, managers of national funds, including special funds, which under current law is regulated in securities law, be covered by the new law.