BlackRock is pleased to have the opportunity to respond to the Call for Evidence AIFMD passport and third country AIFMs.

Transcription

1 8 th January 2015 European Securities and Markets Authority 103 Rue de Grenelle Paris France Submitted via electronic submission RE: Call for evidence AIFMD passport and third country AIFMs Dear Sirs, BlackRock is pleased to have the opportunity to respond to the Call for Evidence AIFMD passport and third country AIFMs. BlackRock is a premier provider of asset management, risk management, and advisory services to institutional, intermediary, and individual clients worldwide. As of 30 September 2014, the assets BlackRock manages on behalf of its clients totalled 3.57 trillion across equity, fixed income, cash management, alternative investment and multi-investment and advisory strategies including the ishares exchange traded funds. BlackRock has a pan-european client base serviced from 22 offices across the continent. Public and private sector pension plans, insurance companies, third-party distributors and mutual funds, endowments, foundations, charities, corporations, official institutions, banks and individuals invest with BlackRock. BlackRock represents the interests of its clients by acting in every case as their agent. It is from this perspective that we engage on all matters of public policy. BlackRock supports policy changes and regulatory reform globally where it increases transparency, protects investors, facilitates responsible growth of capital markets and, based on thorough cost-benefit analysis, preserves consumer choice. We welcome the opportunity to address, and comment on, the issues raised by this Call for Evidence and we will continue to contribute to the thinking of ESMA on any specific issues that may assist in improving the final outcome. Overview Operating as both a European and global asset manager, we are able to offer insight into our experiences to date of operating funds under AIFMD from the perspective of both EU AIFMs and non-eu AIFMs. As an early adopter of the AIFMD marketing passport, which we have used extensively since 22 July 2013, and a significant user of AIFMD NPPR, having Article 36 and Article 42 registrations across multiple member states since 22 July 2014, BlackRock has significant practical experience on these matters which we are grateful to have the opportunity to share with ESMA and other policy-makers within this Call for Evidence. Third country passport facilitates EU professional investor choice and greater competition We believe that an extension of the marketing passport to both non-eu AIFMs and non-eu AIFs will have a positive impact on competition and choice within the EU internal market for EU professional investors who are seeking to access the best investment strategies, wherever located globally, to facilitate their long-term savings and retirement goals. 1

2 In our experience, the majority of AIFs that could potentially seek an EU passport for marketing to EU professional investors are already highly regulated in their home jurisdiction for distribution to local retail investors (e.g. U.S 1940 Act mutual funds). Therefore we recommend that it not be necessary to adopt any strict line-by-line equivalency of EU investor protection rules for the non-eu AIFM professional investor passport when a similar outcome has already been achieved for retail investors in the home jurisdiction. As a general comment we would emphasise that AIFMD Level 1 does not contain any requirement for or consideration of reciprocal marketing access for either EU AIFMS or UCITS as a condition to extending the marketing passport to any third country. Therefore, it is unclear why ESMA has expanded its collection of evidence to UCITS management companies, particularly as the experiences of UCITS management companies and their retail investor UCITS might not generally correspond to the experiences of managers of AIFs generally aimed at professional investors. Indeed there are a number of third country jurisdictions which already permit the distribution of UCITS to both local retail and professional investors without any requirement for EU reciprocity. Maintenance of NPPR is essential In the absence of a workable and proven third country marketing passport for third country managers and funds, we believe that continued availability of workable NPPR remain vital for EU professional investor choice. Similarly, in the event that the third country marketing passport is activated on an individual country-by-country basis, we believe that NPPR for other third countries yet to benefit from the third country passport should be maintained indefinitely. Yours faithfully, Alexander Nightingale Director, Legal & Compliance BlackRock 12 Throgmorton Avenue London Tel: Martin Parkes Director, Government Affairs and Public Policy BlackRock 12 Throgmorton Avenue London Tel:

3 Q1: Please describe your experience using the AIFMD passport: - Indicate your home Member State Ireland - BlackRock Asset Management (Ireland) Limited currently manages 154 Irish AIFs, many of which are passported into multiple Member States. - AIFM authorisation received on 22 July Immediate use of marketing passport across multiple Member States following AIFM authorisation. United Kingdom - BlackRock Fund Managers Limited currently manages 53 UK AIFs, the majority of which are passported into the UK only. - AIFM authorisation received 2 May NB: Statistics accurate as at 6 January Number of funds marketed in other Member States (please provide a breakdown by host Member State) 1. Ireland AIFM - BlackRock Asset Management (Ireland) Limited Host Member State AIFs marketed under passport Austria 3 Belgium 6 Denmark 4 Finland 4 France 6 Germany 3 Italy 6 Luxembourg 8 Netherlands 23 Portugal 3 Spain 4 Sweden 6 UK 109 NB: Due to delayed implementation of AIFMD by EEA member states, marketing by BlackRock Asset Management (Ireland) Limited of Irish AIFs continues under existing NPPR in certain EEA member states, where permissible. Statistics accurate as at 6 January United Kingdom AIFM - BlackRock Fund Managers Limited There currently is no cross-border use of the EU marketing passport by our UK AIFM. - Number of funds managed in other Member States (please provide a breakdown by host Member State) Our UK AIFM, BlackRock Fund Managers Limited has recently been authorised to manage a Luxembourg AIF. It is likely that BlackRock will make greater use of the AIFMD management passport for both its Irish and UK AIFMs in the future. Q2: How have you found the passport application process? - Very satisfactory - Satisfactory - Problems encountered. Please explain 3

4 Overall we have found the marketing passport application process very satisfactory. We have however experienced difficulties in certain host Member States, which are noted in our response to Q.4 below. Q3: What is your overall experience of using the passport of the AIFMD? Please explain Our overall experience of using the passport has been very positive. Our Irish AIFM was authorised on 22 July 2013 and almost immediately began passporting in excess of 100 Irish AIFs across multiple Member States. As a very early adopter of the AIFMD passport for the cross-border marketing of multiple AIFs across a number of host Member States, we appreciate the broadly harmonised ability to access different jurisdictions. The ability under AIFMD for an EU AIFM to conclude passport applications with a single home regulator creates significant efficiencies and a consistent process. We were particularly appreciative of the opinion provided by ESMA on 1 August 2013 which clarified that Member States which, at that time, had not yet implemented AIFMD should nevertheless still enable AIFMD compliant passported AIFs to market to professional investors within that jurisdiction. Whilst overall our experience has been very positive, we have experienced difficulties in certain host Member States, which are noted in our response to Q.4 below. Q4: What difficulties have you encountered when trying to use the passport? We have experienced a number of host Member States charging disproportionately expensive passport processing fees (both initially and annually). Passporting AIFs into multiple Member States can be an expensive exercise, where the mere handling/storage of passport notification files by host Member State authorities can cost tens of thousands of Euros. This cost potentially represents a barrier to entry for EU AIFMs, particularly smaller managers. It should be emphasised that, unlike with UCITS marketing passport applications, the work to process AIFMD marketing passports is almost exclusively performed by the home state regulator rather than the host state regulator. Consequently, we think it disproportionate for host state authorities to charge fees for the receipt of AIFMD passport notifications which are at the same level or comparable to fees charged for processing UCITS passport applications. We have also found that one Member State has applied additional requirements over and above the harmonised professional investor passport, in this case requiring that a local paying/information agent be appointed prior to marketing commencing. Although Article 43 of AIFMD permits a host Member State to apply additional requirements for the marketing of AIFs to retail investors, the professional investor passport under AIFMD operates on a fully harmonised basis and additional host Member State conditions or requirements should not be permissible. Deviation from this principle of harmonisation may act to weaken the attractiveness and usefulness of the professional investor passport and create barriers to entry, particularly for smaller managers. Q5: Have you been deterred from using the passport and, if so, why? We believe that continued choice for EU investors and their ability to access the best investment strategies is fundamental and so have sought to use the passport for our EU managed EU AIFs wherever there is appropriate EU professional investor demand. However, we acknowledge that the problems illustrated in our answer to Q.4 could cumulatively act to deter widespread use of the passport, particularly by smaller managers. Q6: Have you experienced issues of investor protection in relation to AIFs marketed or managed from another Member State, including AIFs marketed to retail investors 4

5 under Article 43? If so, please provide details (e.g. number of complaints from investors, the reasons for those complaints etc). No. Q7: Please describe the activity of your organisation in the EU: - Identify whether your organisation operates under Article 36 (marketing of non- EU AIFs by EU AIFMs in a Member State) or Article 42 (management and/or marketing of AIFs by non-eu AIFMs in a Member State) of the AIFMD We market funds both under Article 36 and Article 42 AIFMD. We would note that technically Article 42 relates only to permission for marketing in a Member State of AIFs managed by a non-eu AIFM and not permission for management. - Identify the non-eu country of the AIFM and/or the AIF Our UK AIFM, BlackRock Fund Managers Limited, is the manager of a range of Cayman domiciled AIFs, which are registered for marketing under Article 36 in multiple Member States. We have a number of US AIFM which have registered to market multiple US and Cayman domiciled AIFs under Article 42 in multiple Member States. We also have a Jersey AIFM which has registered a number of Jersey AIFs under Article 42 in multiple Member States. - Number of funds marketed in an EU Member State (please provide a breakdown by Member State) AIFs marketed under Article 36 Host Member State AIFs marketed under Article 36 Belgium 1 Finland 4 Luxembourg 2 Netherlands 6 Sweden 4 UK 7 NB: Due to delayed implementation of AIFMD by EEA and certain EU Member States, marketing by BlackRock Fund Managers Limited of non-eu AIFs continues under existing historical NPPR in certain EEA/EU member states, where permissible. Statistics accurate as at 6 January AIFs marketed under Article 42 Host Member State AIFs marketed under Article 42 Belgium 11 Finland 63 Luxembourg 61 Netherlands 63 Sweden 64 UK 69 NB: Due to delayed implementation of AIFMD by EEA and certain EU member states, marketing by BlackRock non-eu AIFM of non-eu AIFs continues under existing historical NPPR in certain EEA/EU member states, where permissible. Statistics accurate as at 6 January Number of funds managed in an EU Member State (please provide a breakdown by Member State) 5

6 We note that technically, Article 42 relates only to permission for marketing in a Member State of AIFs managed by a non-eu AIFM and not permission for management. Q8: How many times has your organisation received a request for information from an EU NCA? Please indicate your average response time. Q9: How many times has your organisation refused to provide the information requested by an EU NCA? Please explain the reasons. Q10: How many times has an EU NCA performed an on-site visit at your organisation? Q11: How many times has an EU NCA initiated enforcement action against your organisation? Q12: How many times has an EU NCA imposed a sanction on your organisation? Q13: Are there any specific limitations in the legal framework in your country that impede or limit your organisation from collaborating with an EU NCA? If yes, please specify. Q14: Has your organisation experienced issues of investor protection in relation to AIFs marketed or managed in an EU Member State? If so, please describe (e.g. number of complaints from investors, the reasons for those complaints etc). None. Q15: What have been the benefits of the National Private Placement Regimes (NPPR) to you? We believe that continued choice for EU investors and their ability to access the best investment strategies wherever located is fundamental and so the continued availability of workable NPPR remain vital for EU professional investors in the absence of a workable and proven third country marketing passport for third country managers and funds. In the event that the third country marketing passport is activated on an individual country-bycountry basis, we believe that the indefinite maintenance of NPPR for other third countries yet to benefit from the third country passport will be vital for continued EU professional investor choice. Q16: What have been the obstacles or barriers to entry of the NPPR to you? The key obstacles or barriers to entry for NPPR are typically not requirements within AIFMD Level 1 itself, but are national-level NPPR requirements over and above the requirements within Articles 36 or Article 42, which are applied at that individual Member State level only where NPPR is sought. 6

7 These take the form of impractical, disproportionate or costly local requirements which either in aggregate or individually mean that NPPR access to that individual Member State is either not feasible from a cost/benefit basis or not possible from a practical perspective. Examples of such requirements include: - A Member State not applying the derogation under Article 22(3) AIFMD, therefore requiring the annual report of the third country AIF to meet local Member State audit standards rather than continuing to be prepared to meet existing internationally recognised audit standards - A Member State requiring the third country AIFM s home regulator to confirm that the third country AIF is managed in accordance with the local rules of that Member State - A Member State requiring that the third country of the AIF grants reciprocal marketing access to funds from that Member State Notwithstanding the above, it should be emphasised that a number of Member States do not apply any additional national-level only NPPR requirements over those set out in Article 36 or Article 42. More generally across member states which permit NPPR, it is noted that the level of initial and ongoing Article 36 and Article 42 registration fees, together with the cost of navigating nonharmonised registration processes, may cumulatively act to deter managers, particularly smaller managers, from registering funds for NPPR. Furthermore, for Article 42 AIFMs, the cumulative burden and cost of providing regulatory reporting to NCAs in each member state where the AIF is registered for NPPR is an important consideration for managers contemplating NPPR across a number of Member States. Q17: What obstacles did you encounter when trying to register through the NPPR? Please see answers to Q.16 above. More generally, as each Member State has its own individual registration process for Article 36 and Article 42, the differences between the respective registration processes (and any approval periods) across member states can be challenging for managers seeking to conduct coordinated Article 36 and/or Article 42 registrations across multiple Member States. Q18: What have been the costs? There are both initial and ongoing regulatory registration costs for Article 36 and Article 42 registrations. These cumulatively have been expensive, running to tens of thousands of Euros. The initial registration process will typically also require assistance from local legal counsel which incurs further costs. For Article 42 registrations the costs of ongoing compliance with AIFMD are an important consideration. This is particularly the case for Annex IV regulatory reporting, as Article 42 AIFM are obliged to provide regulatory reporting to NCAs in each Member State where they have registered AIFs for marketing. Any differences between member state filing and reporting processes or deviation from the ESMA Annex IV template can be burdensome and create additional costs for managers. Q19: Have you exited countries since the entry into force of the AIFMD NPPR and, if so, why? We have exited marketing of non-eu funds from a Member State since the entry into force of AIFMD NPPR. This has been due to this Member State: - not applying the derogation under Article 22(3) AIFMD, therefore requiring the annual report of the third country AIF to meet local Member State audit standards rather than continuing to be prepared to meet existing internationally recognised audit standards 7

8 - requiring the third country AIFM s home regulator to confirm that the third country AIF is managed in accordance with the local rules of that Member State We have not been able to register non-eu AIFs for NPPR in another Member State due to that Member State requiring that the third country of the AIF grants reciprocal marketing access to funds from that Member State. Q20: Have you been deterred from undertaking private placement and, if so, why? As noted previously, we believe that continued choice for EU investors and their ability to access the best investment strategies, wherever located, is fundamental and so the continued availability of workable NPPR remain vital for EU professional investors in the absence of a workable and proven third country marketing passport for third country managers and funds. Consequently we continue to undertake registered private placement under Article 36 and Article 42 wherever there is appropriate EU professional investor demand and where local NPPR requirements are workable and not disproportionately expensive. Q21: What is the possible impact on competition of an eventual extension of the passport to non-eu AIFMs? We consider that an extension of the passport to non-eu AIFMs will have a positive impact on competition within the EU internal market for professional investors in the EU who are seeking to access the best investment strategies, wherever located globally, to facilitate their long-term saving and retirement goals. Competition benefits investors and encourages efficient and well-functioning markets. The European Commission competition policy website itself states that competition puts businesses under constant pressure to offer the best possible range of goods at the best possible prices, because if they don't, consumers have the choice to buy elsewhere. In a free market, business should be a competitive game with consumers as the beneficiaries. ( Creating a level playing field for non-eu AIFM to passport into Member States will benefit EU professional investor choice whilst encouraging greater internal market competition and efficiency and improved pricing for investors. Improved levels of competition would operate under the consistent high standards of investor protection that a marketing passport for both EU and non-eu AIFM would bring. We would also support the extension of the marketing passport to managers currently marketing non-eu funds under Article 36 AIFMD. EU AIFMs using Article 36 for the marketing of non-eu funds are complying with almost all of AIFMD already the exception being the strict liability requirement for financial instruments held by depositaries. An extension of the passport in these circumstances would encourage greater on-shoring of asset management services (AIFM, depositary and administration) with economic benefits for Member States in the form of job creation and taxation. Q22: What are the risks of an eventual extension of the passport to non-eu AIFMs in relation to market disruptions and investor protection? We consider that the risks of market disruption within the EU internal market and to investor protection would be limited, if any. An extension of the passport will encourage a levelling-up of investor protection standards applying to both EU and non-eu AIFM. In our experience, the majority of AIFs that could potentially seek an EU passport for marketing to EU professional investors are already highly regulated in their home jurisdiction for distribution to retail investors (e.g. US 1940 Act mutual funds). Therefore it should not be necessary to adopt any strict line-by-line equivalency of EU investor protection rules for the 8

9 non-eu AIFM professional investor passport when a similar outcome has already been achieved for retail investors in the home jurisdiction. Other non-eu jurisdictions, such as Switzerland and Jersey, are already implementing AIFMDcompatible regimes in order to enable future use of an extended AIFMD marketing passport. A further element of improved investor protection is the increasingly closer cooperation between Member State and third country regulators since the implementation of AIFMD for example, cooperation arrangements have been completed between regulators as a condition to the operation of Articles 36 and 42 AIFMD and also under Article 20 where investment management is delegated to a third country. This greater interaction between regulators should enable better supervision and improved ability for customer redress where the non-eu AIFM passport is used. Another benefit of an extended passport for both regulators and non-eu AIFMs, would be the need for non-eu AIFMs to provide regulatory reporting only to a single Member State of Reference. This will result in considerably less duplicate reporting for non-eu AIFMs which currently market (and report) into multiple Member States under Article 42 AIFMD, and less duplicate reporting being received and processed by national regulators and, ultimately, ESMA. In the event of an extension of the passport for non-eu AIFs, we would also welcome greater flexibility upon the location of EU depositaries within the EU than would otherwise appear possible under Article 21.5(b) AIFMD. An amendment to Article 21.5(b) could be considered as part of the AIFMD review under Article 69. This greater flexibility would be particularly appreciated for EU AIFMs currently marketing non-eu AIFs under Article 36. For example, BlackRock manages a number of non-eu AIFs via its UK AIFM which, as part of compliance with Art 36, have appointed an Irish depositary-lite provider who utilises the data from the fund s existing Irish administrator to assist with its oversight and monitoring function. If the passport is activated for these funds, it would make greater sense from an operational risk and efficiency and investor protection perspective to retain and expand the existing, tried and tested Irish service providers to include a full Irish depositary rather than have to restructure the operations of the fund and appoint a depositary in either Cayman or the UK (as would appear to be required by Article 21.5(b)), where such service providers for these types of funds are currently limited in numbers. Q23: Is there any particular non-eu country where, as a consequence of the regulatory environment (financial regulation, supervision, tax and anti-money laundering provisions), an eventual extension of the passport would put EU AIFMs and UCITS management companies at a disadvantage vis-a-vis the AIFMs from that country? Please specify and explain. We are not aware of any particular non-eu countries where an extension of the passport would result in a disadvantage for EU AIFMs and UCITS management companies. As both a European and global asset manager, we have direct experience of marketing EU managed AIFs and/or UCITS into a number of third countries, including inter alia Hong Kong, Singapore, Switzerland, Jersey, Japan and the United States. Similarly we have also successfully established local fund management presence in a range of third countries. As a general comment for Qs.23-27, we would emphasise that AIFMD Level 1 does not contain any requirement for or consideration of reciprocal marketing access for either EU AIFMS or UCITS as a condition to extending the marketing passport to any third country. Whilst the Article 67(4) test assessing whether ESMA shall issue positive advice is multifaceted, it does not include any requirement for reciprocal access as a factor be considered specifically: Article 67(4) 9

10 Where ESMA considers that there is no significant obstacles regarding investor protection, market disruption, competition and the monitoring of systemic risk, impeding the application of the passport to the marketing of non-eu AIFs by EU AIFMs in the Member States and the management and/or marketing of AIFs by non-eu AIFMs in the Member States in accordance with the rules set out in Article 35 and Articles 37 to 41, it shall issue positive advice in this regard. Competition, in the context of the Article 67(4) test is in relation to an assessment of a level playing field for marketing within Member States as addressed in Q. 21 of this ESMA paper and as also considered within Article 67(2)(c). It is not an assessment of marketing within non-eu countries. In this respect we would refer to the positive benefits to competition within the EU internal market of extending the marketing passport, as detailed in our answer to Q. 21. Similarly Article 67(2)(c) does not contain any direct or implied consideration of or requirement for reciprocity. Within Article 67(2)(c), consideration of any potential distortions in competition (level playing field) are with regard only to the functioning of the both the EU passport and NPPR within member states and not a consideration of reciprocity. Similarly the original Level 1 intention of the wording of the second part of Article 67(2)(c) (i.e. or any general or specific difficulties which EU AIFMs encounter in establishing themselves or marketing AIFs they manage in any third country. ), only related to EU AIFMs managing and marketing non-eu AIFs (e.g. a UK AIFM under Article 36 managing and marketing a non-eu fund) and addressed a desire by certain Member States to consider whether EU AIFMs of non-eu AIFs, which may have experienced difficulties becoming (or remaining) authorised as AIFMs in their home member state, might see the activation of the third country passport as an opportunity to become, or be replaced by, a non-eu AIFM, potentially meaning the relevant NCA would end up with a lower regulatory nexus over the AIFM/AIF. So, like the first part of Art 67.2(c), the second part is also to be read in the context of potential impact to the EU internal market and not in the context of third country market access/reciprocity. As a further general comment for Qs.23-27, we also note that it is unclear why ESMA has expanded its collection of evidence to UCITS management companies, particularly as the experiences of UCITS management companies and their retail investor UCITS might not generally correspond to the experiences of managers of AIFs generally aimed at professional investors. Indeed there are a number of third country jurisdictions which already permit the distribution of UCITS to both local retail and professional investors without any requirement for EU reciprocity. Q24: Is there any particular non-eu country that imposes heavier requirements for EU AIFMs or UCITS management companies in comparison to those that non-eu AIFMs have to comply with in order to do business in the EU? Please specify and explain. As a general comment for Qs.23-27, we would emphasise that AIFMD Level 1 does not contain any requirement for or consideration of reciprocal marketing access for either EU AIFMS or UCITS as a condition to extending the marketing passport to any third country. Please see our response to Q.23 for detailed analysis on Article 67(4) and Article 67(2)(c) and specifically that neither provision considers reciprocal marketing access to third countries as a relevant factor when activating the third country passport. As a further general comment for Qs.23-27, we also note that it is unclear why ESMA has expanded its collection of evidence to UCITS management companies, particularly as the experiences of UCITS management companies and their retail investor UCITS might not generally correspond to the experiences of managers of AIFs generally aimed at professional investors. Indeed there are a number of third country jurisdictions which already permit the distribution of UCITS to both local retail and professional investors without any requirement for EU reciprocity. Notwithstanding the above, we are not aware of any particular non-eu countries imposing heavier requirements. 10

11 As both a European and global asset manager, we have direct experience of marketing EU managed AIFs and/or UCITS into a number of third countries, including inter alia Hong Kong, Singapore, Switzerland, Jersey, Japan and the United States. Similarly we have also successfully established local fund management presence in a range of third countries. Our experience demonstrates that such third countries do not impose excessively heavy requirements or restrictions on European asset managers. Q25: Have you experienced difficulties or limitations in establishing or marketing AIFs or UCITS in any non-eu country? Please specify the non-eu country and the specific difficulties or limitations that you have encountered. As a general comment for Qs.23-27, we would emphasise that AIFMD Level 1 does not contain any requirement for or consideration of reciprocal marketing access for either EU AIFMS or UCITS as a condition to extending the marketing passport to any third country. Please see our response to Q.23 for detailed analysis on Article 67(4) and Article 67(2)(c) and specifically that neither provision considers reciprocal marketing access to third countries as a relevant factor when activating the third country passport. As a further general comment for Qs.23-27, we also note that it is unclear why ESMA has expanded its collection of evidence to UCITS management companies, particularly as the experiences of UCITS management companies and their retail investor UCITS might not generally correspond to the experiences of managers of AIFs generally aimed at professional investors. Indeed there are a number of third country jurisdictions which already permit the distribution of UCITS to both local retail and professional investors without any requirement for EU reciprocity. Notwithstanding the above, there are always local rules to navigate in operating or marketing within a third country with a highly developed local regulatory infrastructure. As both a European and global asset manager, we have direct experience of marketing EU managed AIFs and/or UCITS into a number of third countries, including inter alia Hong Kong, Singapore, Switzerland, Jersey, Japan and the United States. Similarly, we have also successfully established local fund management presence in a range of third countries. Our experience demonstrates that such third countries do not impose excessively heavy requirements or restrictions on European asset managers. Q26: Do you have evidence showing that existing difficulties or limitations in non-eu countries have deterred fund managers in your jurisdiction from deciding to establish or market AIFs or UCITS they manage in the non-eu country? Please specify the non-eu country and explain the difficulties or limitations. As a general comment for Qs.23-27, we would emphasise that AIFMD Level 1 does not contain any requirement for or consideration of reciprocal marketing access for either EU AIFMS or UCITS as a condition to extending the marketing passport to any third country. Please see our response to Q.23 for detailed analysis on Article 67(4) and Article 67(2)(c) and specifically that neither provision considers reciprocal marketing access to third countries as a relevant factor when activating the third country passport. As a further general comment for Qs.23-27, we also note that it is unclear why ESMA has expanded its collection of evidence to UCITS management companies, particularly as the experiences of UCITS management companies and their retail investor UCITS might not generally correspond to the experiences of managers of AIFs generally aimed at professional investors. Indeed there are a number of third country jurisdictions which already permit the distribution of UCITS to both local retail and professional investors without any requirement for EU reciprocity. Notwithstanding the above, we have direct experience of marketing EU managed AIFs and/or UCITS into a number of third countries, including inter alia Hong Kong, Singapore, Switzerland, 11

12 Jersey, Japan and the United States. Similarly we have also successfully established local fund management presence in a range of third countries. Our experience demonstrates that such third countries do not impose excessively heavy requirements or restrictions on European asset managers. Q27: Could you please identify the non-eu countries that, in your opinion, grant market access to EU AIFMs and UCITS management companies under broadly equivalent conditions? As a general comment for Qs.23-27, we would emphasise that AIFMD Level 1 does not contain any requirement for or consideration of reciprocal marketing access for either EU AIFMS or UCITS as a condition to extending the marketing passport to any third country. Please see our response to Q.23 for detailed analysis on Article 67(4) and Article 67(2)(c) and specifically that neither provision considers reciprocal marketing access to third countries as a relevant factor when activating the third country passport. As a further general comment for Qs.23-27, we also note that it is unclear why ESMA has expanded its collection of evidence to UCITS management companies, particularly as the experiences of UCITS management companies and their retail investor UCITS might not generally correspond to the experiences of managers of AIFs generally aimed at professional investors. Indeed there are a number of third country jurisdictions which already permit the distribution of UCITS to both local retail and professional investors without any requirement for EU reciprocity. Notwithstanding the above, our experience is that whilst there are always local rules to navigate in operating or marketing within a third country with a highly developed local regulatory infrastructure, such third countries do not restrict market access to European asset managers. As both a European and global asset manager, we have direct experience of marketing EU managed AIFs and/or UCITS into a number of third countries, including inter alia Hong Kong, Singapore, Switzerland, Jersey, Japan and the United States. Similarly we have also successfully established local fund management presence in a range of third countries. We would therefore consider such countries as already granting market access under broadly equivalent conditions. Q28: What are the conditions that EU AIFMs and UCITS management companies have to comply with in order to manage or market AIFs or UCITS in your jurisdiction? Please specify. Q29: In what way is your current regime (regulatory, tax etc.) different from the EU framework? Please explain. 12