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Insurers and AIMA seek to refine AIFMD

Tuesday 18 January 2011 - by Will Henley

A new EU directive regulating the hedge fund and private equity industries should be refined to make it as "flexible" as possible, two leading associations have said.

In a formal response to a January consultation on the Alternative Investment Fund Managers Directive, released on Monday, the Alternative Investment Management Association calls on EU officials to make the directive better reflect the "great diversity" of hedge funds.

The call comes as the European Insurance and Reinsurance Federation outlined its concerns today on Article 9 of the directive - relating to professional indemnity insurance - claiming that interpretation should be "as flexible and broad as possible" or risk a "negative impact".

The two organisations detail their concerns in separate letters to the new European Securities and Markets Authority, which is preparing advice on its implementation for the European Commission.

The federation says: "In order for insurers to reasonably predict the financial capacity needed to cover relevant claims, and thus help ensure the effectiveness of insurance, professional indemnity insurance must not be utilised as a source of compensation for arbitrary investment decisions or as a financial guarantee against fluctuations in the financial investment market."


Jiri Krol, AIMA's director of policy and government affairs, adds: "Flexibility, proportionality and openness are three key features which the regulation should retain if it is to succeed in delivering the policy objectives while preserving the existing breadth of business models and strategies."

ESMA is set to send its advice to the Commission in September, which in turn will issue a consultation on implementing measures in November, alongside an impact assessment.


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