On November 26, the European Commission (Commission) issued a press release stating that it has sent formal requests to Latvia, Poland and Spain to provide it with notification of the measures each country has taken to fully comply with the Alternative Investment Fund Managers Directive (AIFM Directive). The AIFM Directive sets out a comprehensive regulatory and supervisory framework for managers of alternative investment funds and should have been implemented into national law before July 22, 2013. As yet, Poland and Spain have failed to fully implement the AIFM Directive into their national law and the Commission has noted that Latvia has only partially enacted the AIFM Directive. Each of these three countries have been given two months to inform the Commission as to what measures they have taken to fully comply with the AIFM Directive. Failure to provide notification of adequate measures could lead the Commission to refer each country to the EU Court of Justice, which would likely result in significant fines.

EU directives are passed in Brussels by the European Council of Ministers and the European Parliament and are required to be implemented in the national law of all 28 member states of the European Union so as to ensure that there is a fully functioning single market. The failures in Poland, Spain and Latvia will therefore mean that any alternative investment fund manager attempting to conduct business in those countries will be at a competitive disadvantage and adds complexity and uncertainty to the process of marketing or managing funds in those jurisdictions until the AIFM Directive is adequately transposed into national law. 

The Commission’s press release of November 26 (covering the foregoing and other issues) is available here.