Norwegian authorities failed to implement the AIFMD within the transposition deadline of 22 July 2013. The Ministry of Finance is currently 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 1 July 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 shall be implemented in Norway through the AIFM Regulation:
- The Commission Delegated Regulation No 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 No 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 17.12.2013 -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 shall 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 AIF’S TO NON-PROFESSIONAL INVESTORS
It is generally expected that the Norwegian AIFM Act will allow AIFM’s to market AIF’s to non-professional investors in Norway, however, with several requirements to safeguard investor protection, i.a. through licensing requirements for the AIFM (regardless of the size of AuM); a requirement of drafting and publishing certain information through a Key Investor Information Document; and a requirement of conducting a suitability test of each non-professional investor, similar to that under MiFID.
In the draft AIFM Regulation the Ministry of Finance suggests that the Key Investor Information Document shall include the following:
- identification of the AIF
- 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 utilize financial instruments
- information regarding investors’ right to redemption or sale of shares in the AIF
- presentation of historical rate of return or expected return,
- information about total costs and fees
- risk and return profile, including guidance and warnings on risks related to investing in the AIF
- 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 shall be kept up to date at any time and shall be drafted in Norwegian.
THE NEXT STEPS
The AIFM Regulation is on a hearing round until 18 May 2014. The Ministry of Finance aims to adopt the AIFM Regulation shortly after the Norwegian Parliament has considered the AIFM Act, which will probably take place during June 2014. Final implementation of the AIFMD in Norway will probably take place on or around 1 July 2014.
Article is co-authored by Associate Christoffer N. Sortland, email@example.com Tel: +47 992 41 453
Christoffer Nordby Sortland is based at Steenstrup Stordrange’s Office in Oslo and part of the Firm’s M&A and Corporate Practice.