Newsletter-21

248 NEWSLETTER 2016 Impact of the Directive on Private Equity Investments In accordance with Articles 36 and 42 of the AIFMD, non-EU AIFMs and non-EU AIFs managed by EU AIFMs are subject to the national private placement regime (“NPPR”) of each of the Mem- ber States where the AIFs are marketed or managed. However, the AIFMD seeks to progressively replace the NPPR with the concept of “ passport ” for AIFMs to offer their services in different countries on the basis of a single authorization. According to this “ passport ” regime, once an AIFM is authorized in one EU member state and com- plies with the rules of the Directive, the AIFM is entitled to manage or market funds to professional investors throughout the EU (Eur-Lex). Initially, the Directive administers so that such “ passport ” is reserved to EU AIFMs and AIFs, but to be potentially extended 15 . ESMAAdvises on Extension of Funds Passport to 12 Non-EU Countries In general, ESMA is expected to carry out an active role in the establishment of a common supervisory culture by promoting com- mon supervisory approaches and practices. In terms of the “ passport ” concept with regard to non-EU AIFs, the ESMA has a strategy to look at each non-EU country individually to develop a comprehensive as- sessment methodology based on the criteria set out in the AIFMD; namely, i) investor protection, ii) market disruption, iii) competition and iv) the monitoring of systemic risk. The Directive provides that where ESMA considers that there are no significant concerns in rela- tion to these four elements, ESMA should issue positive advice 16 . In this regard, as a pioneering example to such extension of the passport under the Directive, the ESMA has recently published its Advice in relation to the application of the AIFMD passport to non-EU AIFMs and AIFs in twelve countries. These countries are Canada, Guernsey, Japan, Jersey and Switzerland, Hong Kong, Singapore, Australia, 15 h t t p s : / / www. l e x i s n e x i s . c o m / u k / l e x i s p s l / f i n a n c i a l s e r v i c e s / document/393814/5J10-F9F1-F18F-P19T (Accessed on 29/12/2016 through Lexis Library database). 16 ECON hearing on AIFMD passporting 11 October 2016 https://www.lexisnexis. com/uk/lexispsl/financialservices/document/393814/5J10-F9F1-F18F-P19T (Accessed on 29/12/2016 through Lexis Library database).