Regulation of Private Equity Managers
- Hannes Glaus, Bratschi Wiederkehr & Buob
- Dieter Wirth, Pricewaterhouse Coopers
- Felix Haldner, Partners Group
- Felix Rohner, Capvis
- Hans Markvoort, LGT Capital Partners
- Ulf Klebeck, Vontobel
- Harald Zeiter, Capital Dynamics
- Björn Böckenförde, ZurmontMadison
In most parts of the Western world private equity is in the process of being sub-jected to prudential and systemic-risk related regulation by the various financial market authorities. Last year the European Union adopted the Alternative In-vestment Fund Manager Directive ("AIFM-D"). And the USA enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") as well as the Foreign Account Tax Compliance Act ("FATCA").
Alternative Investment Fund Manager Directive
By the end of last year the anxiously awaited Alternative Investment Manager Di-rective of the European Union was signed into law. In principle, the Directive will become effective in 2013 with various parts phasing in, however, only at later stages. Most notably the passport for third-country managers is planned to be available only in 2015 (subject to certain conditions being fulfilled).
The Directive is more accommodating towards 3rd countries (non-EU countries) than the first draft. If Switzerland puts the necessary internal regulation and co-operation treaties with the EU in place, Swiss managers will have the following options:
- A Swiss manager may obtain a passport for marketing its private equity fund in the EU just like an EU manager if the manager complies with all the pro-visions of the Directive.
- A Swiss manager may only exercise portfolio management functions for e.g. a Luxembourg private equity fund, in which case the manager only needs to comply with certain provisions of the Directive (above all Art. 20).
- A Swiss Manager may opt not to comply with the Directive at all and still have European investors if he does not actively market its private equity fund to such investors (so called "reverse solicitation").
Swiss Regulation
Swiss private equity managers can profit from the mentioned options under the AIFM-D only, if Switzerland regulates its managers along the requirements of the Directive. Currently the "Staatssekretariat für Internationale Finanzfragen (“SIF") is in the process of drafting a first version thereof together with FINMA. Our work-ing group had several meetings with the two government agencies. SIF and FINMA should provide us with a first draft of the new Swiss regulation in August of this year. If the draft does not meet with too much resistance it will thereafter be submitted to a broader circle for comments ("Vernehmlassung").
The Legal & Tax Chapter of SECA has established a working group in order to follow and assess the regulatory developments in the private equity space around the globe and in order to present our interests to the Swiss authorities who are currently drafting the Swiss regulation in response to these developments.
The goal of our working group is a balanced and sensible Swiss regulation con-centrating on those rules which are necessary in order to preserve the mentioned options. Among others, we would like the regulation in Switzerland to allow alter-native investment managers to opt out of the future Swiss regulation if they choose not to market their private equity funds actively into the EU or if the size of their investment funds remain below the thresholds stipulated in the Directive.
Dodd-Frank Act. and FATCA
In addition to the European AIFM-D, the USA has enacted the Dodd-Frank Act. Further FATCA not only troubles the financial but also the private equity industry.
216 kB / 27.10.2011 14:52