NETHERLANDS: AFM Informs Light Managers of Relevant Regulations

Tuesday April 20 2021

On 15 April 2021, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) sent a sector letter to alternative investment fund managers (AIFMs) falling under the ‘light’ regime.

‘Light’ AIFMs are exempted from the EU Alternative Investment Fund Managers Directive’s license obligation as laid down in Article 2:65 of the Act on the Financial Supervision (Wet op het financieel toezicht, the AFS), but are required to register themselves with the AFM.

In the letter, the AFM has provides a non-exhaustive overview of applicable legislation and regulations. In particular, the letter highlights the following requirements:

The total assets of all alternative investment institutions jointly provided by the manager managed must not exceed € 100 million (if leveraged applied), or € 500 million (if no leverage is applied and if the investment institution is closed-end in the first five years.

The registration regime can only be used if:

• Units are offered exclusively to professional investors; or
• When not exclusively offered to professional investors, if the units are offered to less than 150 persons; the units can be acquired at an equivalent value of at least € 100,000 per participant, or; the units have a nominal value per right of at least€ 100,000.
• Light AIFMs are required to annually report certain financial data to the Dutch Central Bank

The AFM also points out that other rules and regulations may be relevant to light AIFMs, such as the EU Market Abuse Regulation, the EU Regulation on packaged retail and insurance-based investment products (PRIIPs), the Unfair Commercial Practices Act (Wet oneerlijke handelspraktijken), anti-money laundering and terrorist financing rules and regulations, and sanctions legislation.

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