Alternative Investment Fund Regulations in EU

Alternative investment funds are subject to the regulations of the EU AIFMD Directive regarding registration, asset management, risk assessment, provision of complete information on investment strategies, ensuring a reliable control system, and reporting.

Complying with certain regulations set out in the AIFMD is necessary to register an AIF in one of the EU jurisdictions.

Depending on the jurisdiction in which they operate, they may differ.

An AIF is a financial instrument that:

• Is used to attract capital from a limited number of investors;
• Allows you to invest in assets other than ordinary shares and bonds;
• Can apply more flexible investment strategies;
• Provides ample opportunities for diversifying an investment portfolio;
• Has specifics in different jurisdictions.

The law aimed at improving the functionality of AIFMD

AIFMD establishes uniform rules for regulating and supervising alternative investment funds in the European Union. Adopting a legislative proposal in 2021 made it possible to improve investor protection, ensure better monitoring and risk management for financial stability, and make the AIF market even more efficient.

Investment funds are an attractive tool for investors who want to generate income without direct participation in asset management.