Alternative Investment Fund Managers (AIFM) Directive

The AIFM directive was approved by the European Parliament on 11 November 2010. It will come into effect during 2012, and fund managers subject to the directive will need to apply for authorisation in 2013. The directive does allow for the continued existence of investment trusts, including self-managed trusts, with no substantial changes to their governance arrangements. However our view remains that investment trusts, as low-risk, diversified equity investment vehicles already subject to a robust governance regime and regulated by the Listing Rules, should never have been caught by the directive.

Alliance Trust is opposed to the Directive as currently drafted for the following reasons:

In principle – investment trusts do not cause systemic risk, on the contrary they offer retail investors access to markets with greater diversification and lower risk than they could achieve by direct investment.

In relation to regulatory overlap – Alliance Trust is already subject to regulation as a listed company whose shares are traded on the London Stock Exchange. The new Directive would introduce additional, overlapping and inconsistent requirements.

On practical issues – various requirements within the Directive are inconsistent with the way investment trusts operate, and others would create additional cost with no obvious benefit for investors.

If you would like more information, please read our more detailed note

For an update on the progress of the Directive, please read our latest update
IF THE DIRECTIVE IS PASSED IN ITS CURRENT FORM IT WILL REDUCE CHOICE AND INCREASE COSTS FOR INVESTORS WITHOUT ANY INCREASE IN INVESTOR PROTECTION.