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Norway: New pieces in the AIFMD puzzle

Klaus Henrik Wiese-HansenChristoffer N Sortland
Implementation of the Alternative Investment Fund Managers Directive (AIFMD) in Norway is gradually nearing. On February 18 2014, the Ministry of Finance sent a draft for new regulations on public hearing, with a deadline for comments of May 18 2014. This article provides a short summary of the draft regulations, which partly concerns the EU Commission Delegated Regulations under the AIFMD.

Norwegian authorities failed to implement the AIFMD within the transposition deadline of July 22 2013. The Ministry of Finance is drafting an AIFM Act, which is expected to be proposed before Easter 2014. Implementation of the AIFMD in Norway will probably take place on or around July 1 2014.

As part of the AIFMD, Norway needs to implement the EU Commission Delegated Regulations under the AIFMD. These will be implemented through the proposed regulation to the AIFM Act (the AIFM Regulation). The AIFM Regulation is now on a hearing round, and is expected to be adopted by the Ministry of Finance during June 2014.

The proposed AIFM Regulation

The Ministry of Finance suggests that the following EU Commission Delegated Regulations will be implemented in Norway through the AIFM Regulation:

  • The Commission Delegated Regulation 447/2013, establishing the procedure for AIFMs which choose to opt in under Directive 2011/61/EU of the European Parliament and of the Council;
  • Commission Delegated Regulation 231/2013, supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision; and
  • Commission Delegated Regulation of December 17 2013, supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to regulatory technical standards determining types of alternative investment fund managers.

The Ministry of Finance suggests implementing the above-mentioned Commission Delegated Regulations as is in Norway, without any amendments.

Remuneration rules under AIFMD

The Ministry of Finance also suggests that the Norwegian guidelines and remuneration rules should be in accordance with the remuneration rules set out in AIFMD's appendix 2, and in the European Securities and Markets Authority (Esma) Guidelines on sound remuneration policies under the AIFMD. The above implies that the Ministry of Finance will not suggest any amendments to the remuneration rules under AIFMD in Norway.

Marketing of AIFs to non-professional investors

It is generally expected that the Norwegian AIFM Act will allow AIFMs to market AIFs to non-professional investors in Norway. However, there will be several requirements to safeguard investor protection: licensing requirements for the AIFM (regardless of the size of assets under management); a requirement of drafting and publishing certain information through a Key Investor Information Document; and, a requirement to conduct a suitability test of each non-professional investor, similar to that under the Markets in Financial Instruments Directive.

In the draft AIFM Regulation, the Ministry of Finance suggests that the Key Investor Information Document should include: (i) identification of the AIF; (ii) a short description of the object of the AIF and its investment strategy, including which assets and markets the AIF can invest in, and whether the AIF can raise loans or utilise financial instruments; (iii) information regarding investors' rights to redemption or sale of shares in the AIF; (iv) presentation of historical rate of return or expected return; (v) information about total costs and fees; (vi) risk and return profile, including guidance and warnings on risks related to investing in the AIF; (vii) information on where prospectus, annual and semi-annual reports are available, and which language these documents are drafted in, and that these documents may be obtained free of charge.

The Key Investor Information Document should be kept up to date, and should be drafted in Norwegian.

Klaus Henrik Wiese-Hansen and Christoffer N Sortland

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