Approval of Alternative Investment Fund Managers Directive to Launch Fund Industry in BVI

The Alternative Investment Fund Managers Directive, final terms of which were approved by the European Parliament on November 11, 2010, allows for the distribution of non-EU funds to professional investors in the European Union. There are two methods of distribution, one of them, the private-placement regime, has been traditional in the EU for non-EU funds, and it will remain in place until 2018. It is proposed that in 2015 it will transition to allow full access to EU passport marketing regime to non-EU funds on the same terms as EU funds. EU funds will become eligible for a passport in 2013. This method, along with the alternative method of the EU marketing passport system, will be subject to similar conditions. These conditions include the need for supervisory co-operation agreements between the regulator of the EU member state in which a fund is being marketed and the regulator of both the fund manager and the fund.

Walkers, the leading international financial centre law firm, welcomed the confirmation of the Alternative Investment Fund Managers Directive and the removal of uncertainty for non-EU fund managers marketing non-EU funds in the European Union. According to Walkers, this is a very positive development for investment funds industry in the BVI, Cayman Islands and Jersey. Rod Palmer, partner and Global Head of Investment Funds with Walkers, said that "The confirmation that non-EU fund managers will be able to continue marketing Cayman Islands, BVI and Jersey funds to professional European investors is excellent news for the industry."

Richard May, Walker's partner based in the BVI, said that the Cayman Islands, BVI and Jersey are highly rated by the FATF in respect to their anti-money laundering regimes, so they will not have to make any changes in their funds' operations to comply with the Directive.