The Alternative Investment Fund Managers Directive (the “Directive”) will be implemented on July 22, 2013 and will impact the reporting requirements of alternative investment fund managers (“AIFMs”) covered by the Directive, including hedge funds based in the European Union as well as non-EU managers, including managers based in the United States.

New York hedge fund law firm Sadis & Goldberg has issued an alert explaining the consequences of the Directive for U.S. based investment advisers acting as a manager to an alternative investment fund (“AIF”) based in the EU or that manages a non-EU fund (e.g., Delaware, Cayman) and markets the non-EU fund to investors in the EU. Investment advisers must comply with the first phase of the Directive by July 22, 2013 or carefully understand the nuances of the relevant exemptions in order to remain outside of the scope of the Directive.

Next steps for Non-EU based Investment Advisers

Advisers who plan to market funds to any EU member state after July 21, 2013 will need to:

Determine whether marketing undertaken after July 21, 2013 is at the initiative of the relevant EU based investors.
Check and monitor the status of co-operation arrangements.
Review contents of any private placement memorandum or other marketing materials.
Establish systems and controls for preparation of an annual report to investors
Establish place systems and controls for preparation of the periodic and regular disclosure to investors.
Review and monitor implementation of provisions of the Directive governing the obligations of AIFMs.

Conclusion: It would be prudent for advisers based in the US (and/or non-EU AIFMs) to consider their options and start planning for the new requirements under the Directive.