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Gibraltar’s Small Fund Manager Regime
The Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD) was transposed into Gibraltar law on 22 July 2013 under the Financial Services (Alternative Investment Fund Managers) Regulations 2013 (AIFM Regulations). The AIFM Regulations and AIFMD do not apply to managers who manage portfolios of alternative investment funds (AIFs) whose assets under management:
• including any assets acquired through the use of leverage, in total do not exceed a threshold of €100 million; or
• €500 million in the case of certain closed-ended unleveraged AIFs;
(Small AIFMs).
AIFMD does not apply to Small AIFMs unless they choose to opt-in. Recital 17 to the AIFMD provides that the exemption for Small AIFMs “should not limit the ability of Member States to impose stricter requirements on those AIFMs that have not opted in.”
Although most EU jurisdictions had pre-AIFMD licensing regimes for fund managers, the knock-on effect of AIFMD in those jurisdictions was the implementation of a quasi-AIFMD regime (which in some cases is fairly burdensome) for those fund managers that fall within the Small AIFM exemption. Thus Small AIFMs based within certain EU jurisdictions may find that, notwithstanding their exemption, they have to comply with alternative regimes which are just as burdensome, thereby diluting the benefit of the small size exemption. Such parallel regimes do not take account of the quantity of business they undertake and do not grant them access to the EU’s single market.
Taking into consideration that Small AIFMs can manage AIFs with a considerable amount of AUM, the publication today of Gibraltar’s Small Fund Manager legislation is a regime with a reasonable level of minimum capital (a minimum of £15,000) which permits the prudent supervision of Small AIFMs. Likewise, the Gibraltar Financial Services Commission’s application fees and annual fees are commensurate with the amount of business undertaken by Small AIFMs. The application fee for authorisation is £3,000 and the annual fee £4,640 with an additional fee of £300 per AIF managed by the Small AIFM.
In addition to some basic conditions for authorisation and a minimum capital requirement, Small AIFMs will, inter alia, need to comply with a set of basic operating conditions, have sufficient resources available and suitable systems and controls.
Whilst the creation of Gibraltar’s Small AIFM regime will also continue to serve Gibraltar well post-Brexit when AIFMD may only apply where access to the EU single market is required, we expect an immediate influx of applications for licensing. Initially, we envisage that existing Gibraltar registered external Small AIFMs will apply for authorisation within the 6 month transitional period. Furthermore, we envisage that certain MiFID firms may restructure their business as Small AIFMs as opposed to restructuring their business for MiFID II.
Notwithstanding Brexit looming in the near horizon, the fundamental benefits of establishing in Gibraltar continue to exist and in addition it has been confirmed that there will be bilateral UK/Gibraltar market access, meaning that Gibraltar could become an access hub for the UK market.
Key Benefits
• A regulator that understands and supervises the finance industry in a pragmatic manner;
• A Small Fund Managers regime which reflects the amount of business undertaken;
• Speed to market;
• Mediterranean lifestyle;
• Low personal taxation for fund managers; and
• Low corporate tax rate of 10% on profits accrued in or derived from Gibraltar.
The information in this publication is for general information purposes only and does not constitute professional advice, legal or otherwise and does not intend to be comprehensive. Triay & Triay does not accept responsibility for any loss that may arise from accessing or relying upon the information contained in this publication.
Triay & Triay has been actively involved creation of the regime and in the drafting of the amendments to the Financial Services (Collective Investment Schemes) Regulations 2011.
The Financial Services Team Triay & Triay
For further information please do not hesitate to contact our Financial Services team on: [email protected]
Melo Triay Partner
E: [email protected] T: +350 200 72020
Jay Gomez Senior Associate
E: [email protected] T: +350 200 72020
Javi Triay Associate
E: [email protected] T: +350 200 72020
Chris Davis Associate
E: [email protected] T: +350 200 72020
triay & triay gibraltar28 Irish Town, Gibraltar
Telephone +350 200 72020 Facsimile +350 200 72270 Email [email protected]
triay & triay spain s.l. sotograndePuerto de Sotogrande, Bloque A, Portal 4, 2º– 8
11310 Sotogrande, Cádiz
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triay & triay spain s.l. marbellaAv. Ricardo Soriano Nº 12, 2º– 4
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