Call it procrastination, call it the post-Christmas pile of paper work, but most hedge funds and private equity groups still haven’t submitted their application to operate under new EU regulations coming into force this year, research shows.
With less than six months to go until the new laws come into force, over 80 per cent of fund managers still haven’t applied to be authorised under the new rules, called the alternative investment fund managers directive (catchy title, right?)
The figures, uncovered by BNY Mellon, show four in ten managers plan to apply for authorisation before the end of March. A further 20 per cent said they’d leave it right up until deadline, which falls on 22 July.
The rules – which officially came into force in July 2013 but have a one year grace period – are designed to help regulate so-called alternative investment managers, basically hedge funds and private equity funds.
"There is a danger of a significant bottleneck developing in the application process, as many managers surveyed are yet to fully address their AIFMD requirements in time for the July deadline," BNY Mellon’s Hani Kablawi said.
With compliance with the rules estimated to cost in the region of $300,000 per institution, perhaps it’s not only procrastination putting managers off from applying.