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18 November 2015

SL secures full scope AIFM status

On 5th November, SL Investment Management (SL) welcomed confirmation from the UK Regulator, the Financial Conduct Authority (FCA), that 'full scope' Alternative Investment Fund Management (AIFM) status had been granted.

SL has been authorised as a 'sub threshold' AIFM since July 2014, specifically in relation to existing Alternative Investment Funds (AIFs) where the active management of assets has been prerequisite to achieving the requirements of investors.

David Roxburgh, CEO at SL Investment Management said, "Gaining sub threshold AIFM status in 2014 was an essential requirement for our existing client base, and the team at SL were delighted to accomplish this. Full scope authorisation allows us to extend our management remit and to further expand our global reach".

As part of the new authorisation, SL has appointed Elian Fund Services as the Depositary for its existing range of AIFs. The Depositary function provides independent oversight into the management of the AIFs and safeguarding of the AIF assets.

David Roxburgh continued, "The team at Elian has really impressed us with their understanding of the specialist assets we manage combined with having the necessary credentials to work with in a focused and efficient manner".


What is the Alternative Investment Fund Management Directive?

The European Union (EU) brought about the Alternative Investment Fund Management Directive (AIFMD) in the wake of the global financial crisis in 2008, with the legislation formally adopted across the continent during 2011.

Although written into European law in July 2011, adoption of the regulation into individual member states has taken some time, with many jurisdictions continuing to appear reticent to the change. The UK transposed the regulation into UK law in July 2013, with a subsequent twelve month transitional period granted to smooth the implementation.

Prior to the conception of the new regulation, a rapidly expanding alternative investment fund industry had fallen somewhat below the EU regulatory radar. Consequently, the AIFMD was borne out of a need to provide a more robust regulatory framework, with the overarching goal of increasing investor protection and regulatory awareness of potential systemic risk.

The directive aims to improve transparency through a more frequent and open system of reporting; tightening up on governance, mitigation of operational risks and managing potential conflicts of interest.

The scope of the directive focused to encompass hedge funds, private equity and real estate funds. However, SL's existing insurance and longevity based products have also been incorporated within the scope of the legislation.

For further information on the management services that SL can provide under the AIFMD regulatory framework, please contact David Roxburgh or Patrick McAdams at SL.