Regulatory Capital Requirements
An authorised AIFM is required to hold minimum regulatory capital of at least €125,000 plus 0.02% of its assets under management in excess of €250 million, subject to a cap of €10 million. An AIFM must also either maintain professional indemnity insurance or hold additional own funds of 0.01% of assets under management.
In practice, the Central Bank requires an AIFM to hold sufficient minimum capital upon authorisation to cover its projected regulatory capital requirements for its first year of operation.
Designated Persons and Managerial Functions
An AIFM must adopt certain policies and procedures, including policies relating to order handling and aggregation; best execution; remuneration; conflicts of interest; risk management; liquidity management; business continuity; accounting policies and procedures; compliance; personal transactions; valuation; anti-money laundering; cyber security; data protection and privacy; record keeping; and outsourcing.
In addition, the AIFM will need to ensure that the agreements it enters with key service providers (i.e., depositaries, administrators, delegate investment managers and external valuers) contain certain provisions prescribed by AIFMD.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
