Legal Alert – AIFMD Implementation in Finland: Government Bill Proposing Law on Alternative Investment Fund Managers Submitted to the Parliament
The Government Bill proposing the implementation of the AIFM Directive (2011/61/EU) has been submitted to Parliament on 5 September 2013. The bill proposes the enactment of a new law on alternative investment fund managers together with amendments to a number of other laws. The new legislation is intended to come into force as soon as possible and on 1 January 2014 at the latest (so far the estimate has been December 2013).
According to the bill, there would be a lighter transitional period under which marketing of AIFs (alternative investment funds) by AIFMs (alternative investment fund managers) to professional investors in Finland would be possible until 22 July 2014 without the restrictions otherwise provided by the law, provided that the marketing has been initiated before the AIFM law entering into force and provided that a notification to the Finnish Financial Supervisory authority is made within a month after the AIFM law entering into force. Furthermore, the final Government Bill gives more clarity on what constitutes marketing, and distinctions have been made between concepts such as e.g. reverse solicitation and soft circling. It may be noted, however, that even when a fund manager could rely on a reverse solicitation exemption (i.e. where the fund manager is approached by the investor without the manager having marketed its funds to the investor), certain provisions of the AIFM law would still apply, including (i) the prohibition to provide information that is untrue or misleading, (ii) the obligation to comply with good securities market practices and (iii) the requirement to disclose certain information to potential investors.
Even though the scope of application will always leave some questions open to interpretation, the interpretation of the concept alternative investment fund has in many ways been dealt with in detail in the Government Bill. It could be noted that the concept of several investors has been elaborated in detail and has not been interpreted as strictly as it has been interpreted by ESMA (the European Securities and Markets Authority), but would be determined more on a case by case basis.
Marketing of AIFs to other than professional investors would as a main rule always be subject to a license in Finland or a corresponding license in any other EEA country. In certain situations the Finnish Financial Supervisory Authority could however allow also AIFMs that are subject to registration only to market AIFs to non-professional investors. One related Finnish peculiarity is that according to the proposal marketing of commitment based funds (where commitments are drawn in installments which would be typical for any private equity or venture capital fund) would be possible only to professional investors.
Marketing of non-EEA AIFs to other than professional investors would not be possible. Marketing of EEA-AIFs to professional investors by EEA-AIFMs that are subject to registration only would be possible under certain conditions.