Risk & Compliance

AIFMD II – Anticipated Revised Requirements for AIFMs and UCITS Managers 

Date:December 12, 2023

In November 2023, the European Council released the compromise text for what is commonly known in the financial industry as AIFMD II. This terminology might be somewhat misleading, as it encompasses alterations not only for Alternative Investment Fund Managers (AIFMs) but also for managers of Undertakings for Collective Investment in Transferable Securities (UCITS), referred to as ICBE’s in the Netherlands. Unlike previous extensive overhauls such as MiFID II, AIFMD II doesn’t completely rewrite the old legislation, but introduces relatively restrained adjustments to the European regulatory framework for those investment fund managers. 

This news item provides insights into the nearly finalised directive, outlining its principal changes. Subsequent news items will delve into key issues and the impact on investment fund managers. 

Background and Timelines  

The Alternative Investment Fund Managers Directive (AIFMD) became effective in 2013. In a June 2020 evaluation report, the European Commission affirmed the proper functioning of AIFMD and the fulfillment of its objectives. Responses from market participants and regulators echoed this sentiment. 

Given the overall satisfaction with AIFMD, the European Commission’s proposal for AIFMD II in November 2021 did entail only limited changes to AIFMD itself. However, it also included various amendments to the UCITS directive, aligning UCITS managers’ requirements with those imposed on AIFMs. 

After negotiations within the European Union, the compromise proposal for amendments to AIFMD and the UCITS directive was unveiled in November 2023. The final European directives are anticipated to appear in the EU Official Journal in the first quarter of 2024. 

EU member states are required to incorporate the adjustments to the regulatory framework into national law within two years of official publication. Consequently, the new rules are expected to be enforceable not before early 2026. 

Key Changes of AIFMD II 

  • AIFMs will be permitted to provide more ancillary activities. More specifically this includes the provision of lending activities by the managed aifs, providing services to securitization Special Purpose Vehicles (SPVs), benchmark administration, and credit servicing activities. 
  • Providing asset management services is no longer mandatory when a fund manager provides investment services as ancillary service. This means that both AIFMs and UCIT managers are permitted to only provide investment advice as ancillary service.  
  • AIFMs will be permitted to engage in loan origination, subject to compliance with the EU Directive on credit servicers and credit buyers (2021/2167) and specific AIFMD requirements. 
  • Outsourcing rules for both AIFMs and UCITS managers will be clarified and additional information on proposed delagated activities must be provided to regulators. Further, fund marketing by third parties may be considered outsourcing. 
  • AIFMS and  UCITS managers must have at least two directors performing work on a full time basis for the manager. 
  • Liquidity management requirements under the AIFMD and the UCITS directive will be adjusted. This includes an obligation for managers of open-ended AIFs and UCITS to have at least two liquidity management tools. 
  • Transparency obligations toward investors will be modified, necessitating changes to prospectuses. 
  • UCITS managers will be obligated to periodically provide a fund report to the regulators which can be compared as the Annex IV report that AIFMs must provide.   
  • Under certain conditions, the depositary of an investment fund may be established in a different EU Member State than the investment fund. 


This overview has provided a general understanding of AIFMD II, its principal changes, and the anticipated timelines. 

EU member states, including the Netherlands, are expected to propose the implementation of AIFMD II into national legislation in 2024 or early 2025. Specific interpretations of the new regulation by EU member states will become clearer at that time. 

Subsequent news items will delve into specific changes in AIFMD II and their implications for various types of managers of AIFs and UCITS. 

For more information on this topic or other matters related to the AIFMD or UCITS directive, Projective Group – Risk & Compliance can assist you. Contact Projective Group – Risk & Compliance at telephone number 020-4165403 or via the contact button.