The jurisdictions are Guernsey, Hong Kong, Jersey, Singapore, Switzerland and the United States.
ESMA said the countries were selected on a number of factors, including the amount of activity already being carried out by entities from these nations under the current national private placement regimes.
It also considered the efforts by stakeholders from these countries to engage with ESMA’s process.
ESMA said it could see no obstacles to the extension of the AIFMD passport to Guernsey and Jersey, while Switzerland would be removing the remaining obstacles to its extension with the enactment of pending legislation.
“No definitive view has been reached on the other three jurisdictions due to concerns related to competition, regulatory issues and a lack of sufficient evidence to properly assess the relevant criteria,” ESMA said in a statement.
Cathy Pitt, a funds partner with law firm CMS, said it was not surprising ESMA would need more time to assess the position of the final three nations, in particular the US.
“One of the principal concerns raised in relation to the US was that permitting the extension of the passport to the US would result in the US receiving preferential treatment in the EU compared to how EU funds and managers are treated in the US,” she said.
Pitt noted that ESMA has clearly stated that the extension of the passport to the US may be delayed until ‘such time as conditions which might lead to a distortion of competition are addressed.’
Meanwhile ESMA said it also plans to assess other groups of non-EU countries for access to the AIFMD passport until it has looked at all of the those it considers should be included in the scheme.
Door opens
If ESMA’s recommendation is approved by the EU Commission, Parliament and Council, then all six nations would be able to offer fund managers an AIFMD marketing passport which would open the door to a much wider base of investors for their products.
Geoff Cook, chief executive of Jersey Finance, welcomed the ESMA recommendation, describing it as “a ringing endorsement of Jersey’s alternative fund regulatory framework”.
“This announcement opens up considerable options to managers so that, whatever their strategy and target markets, they can rely on Jersey as a hub from which to offer highly flexible routes to investors in Europe and beyond,” Cook said.
