How Do AIFMD & UCITS Help You?

Upon hearing it for the first time the terms AIFMD (Alternative Investment Fund Manager’s Directive) and UCITS (Undertakings for the Collective Investment of Transferable Securities) seem like very heavy terms. However, honestly, they are not. Once you drill down to the basics, these terms are fairly simple and useful in the financial world.

The Importance of AIFMD

The AIFMD is the set of regulations that the European Union has established in relation to the marketing techniques used for hedge funds, real estate funds, as well as private equity-based funds. If you wish to market your services in any of these funds, you need to follow the AIFMD rules and have the necessary AIFMD marketing passport to do so. Only a certified marketing agency with the right set of credentials can launch mass media campaigns for such funds.

The importance of AIFMD marketing passport lies in the fact that the person/agency that has this passport understands and is prepared for the risks associated with the marketing techniques. Since they deal with a huge amount of money in marketing these funds, even a minor inconsistency in the marketing campaign can result in a lawsuit against your firm. The certified partner will have all the necessary legal as well as financial expertise to prevent such a mishap.

While AIFMD marketing passport is mandatory for individuals who wish to run the marketing campaigns for an EU-based firm on international grounds. The AIFMD private placement are contracts awarded to the most reputed firms for a limited period that allow it to work internationally for marketing purposes.

The Importance of UCITS


The AIFMD is actually an extension of the UCITS regime. The UCITS regulations allow the distribution of the funds within the EU without the requirement of extra authorization from the government. However, both the buyer as well as the seller of the fund should have a registration under the EU title for conducting authorized transactions.

A firm/person does not need an extra AIFMD passport for the UCITS fund distribution. Instead, the only requirement for this procedure is the normal European passport as a valid document. The UCITS regime helps the marketers work in a systematic pattern and design investment schemes for their customers. Instead of developing the techniques for regional jurisdictions within the EU, the firm is now authorized to develop the techniques for operation within the entire EU.  

The importance of both the UCITS and AIFMD passports lies in the promise that all the major financial decisions pertaining to the real estate, private equity-based, or hedge funds are carried out with the consent of the EU regulations. All the UCITS and AIFMD related documents need the correct authorization and certification from the EU government. A firm/person without the right set of credentials is not authorized to conduct legal transactions. The passport reaffirms the faith of the seller as well as the buyer that there are no loopholes or legal short-cuts involved in the trade of these funds.
 
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