The Financial Supervisory Authority (FSA) approved Regulation No 11 for the amendment and supplement of the FSA Regulation no. 10/2015 regarding the management of alternative investment funds
Regulation no. 11 for the amendment and supplement of the FSA Regulation no. 10/2015 regarding the management of alternative investment funds was published on the website of the Financial Supervisory Authority.
The amendments specifically refer to the provisions regulating an Alternative Investment Fund Manager (AIFM) established in Romania which (a) either directly or indirectly, through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding, manages portfolios of AIFs whose assets under management, including any assets acquired through use of leverage, in total do not exceed a threshold of EUR 100 million or which (b) either directly or indirectly, through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding, manages portfolios of AIFs whose assets under management in total do not exceed a threshold of EUR 500 million when the portfolios of AIFs consist of AIFs that are unleveraged and have no redemption rights exercisable during a period of 5 years following the date of initial investment in each AIF (i.e. registered AIFM).
The main amendments adopted through the new Regulation no. 11 are as follows:
1. the possibility for the AIFM registered with the FSA to be incorporated as a limited liability company, not only as a joint stock company;
2. an AIFM registered with FSA will be able to only manage AIF marketed to professional investors. A registered AIFM can manage AIFS marketed to retail investors only if the respective AIFM was authorized as a management company prior to submitting the application for registration with the FSA or the respective AIFM also submits the application for the transformation into an authorized AIFM with the FSA at the time of requesting authorization for the AIF marketed to retail investors;
3. the removal of the obligation for the registered AIFM to elaborate and deliver to the FSA the policies/practices/systems provided in art. 13-19 of Law no. 74/2015 at the time of registration with the FSA;
4. the possibility for the registered AIFM to send the documents in electronic form, as it was previously provided in the former version for AN authorized AIFM;
5. a registered AIFM, apart for the ones acting also as management companies, to specify in all the official documents that it does not benefit from the supervisory regime of the FSA;
6. registered AIFMs may use code of conduct guides issued by national, European or international associations acting in the field of investments in private equity and venture capital markets;
7. the report of the compliance officer of an AIFM has to include certain information, such as proposals for improvement, as well as the investigation plan set for the following year. The deadline for the submission of the report with the FSA shall be no later than 15 March of the year following the one for which the report is prepared;
8. the internal organization of the registered AIFM will ensure the identification, management and monitoring of conflicts of interest that may arise in the management of the investments and in the evaluation of the assets under management, and the conflicts of interest identified will be communicated to the fund investors, so that a history of these can be reconstructed at the request of the FSA.
Concluding, considering the new provisions of the Regulation no. 11/2021 that eliminate all references to the registered AIFM from the chapter dedicated to the authorized AIFM, as well as express specification of the fact that the management companies, which also request to act as registered AIFMs which exclusively manage AIF marketed for professional investors, will comply only with the requirements applicable to the registered AIFM, it might be determined that certain requirements established for authorized AIFM (such as the one regarding the valuation function) shall no longer be applicable to registered AIFM, bringing therefore a simplification of the regulation regime of registered AIFM.
The new regulations mentioned above shall entry into force at the date of publication in the Official Gazette of Romania of the Regulation no. 11/2021.