Marc van Rijckevorsel, Head of Sales for Corporate Solutions (North America), Alyson Yule, Managing Director of Financial Solutions, and Zachary Milloy, Partner at Paul Hastings Investment Funds & Private Capital

The regulatory framework in the European Union governing the marketing of alternative investment funds (“AIFs”) is the Alternative Investment Fund Managers Directive (“AIFMD”). The AIFMD allows EU member states the ability to allow marketing of non-EU funds in their territory, provided that the fund and its manager comply with a subset of AIFMD's requirements set out in Art. 42 of the AIFMD.

The rules implemented by each EU member state under Art. 42 of the AIFMD are known as National Private Placement Regimes (“NPPRs”), which allow US sponsors to register US funds (and other non-EU funds e.g. Cayman or Canadian funds) for marketing in most EU member states.

In this article, we provide an overview of the NPPR processes in Luxembourg, the Netherlands, and Ireland. Compared to other EU jurisdictions, Luxembourg, the Netherlands, and Ireland have relatively straightforward NPPR processes, enabling US manager to bring US/non-EU funds to market in these jurisdictions quickly and with minimal upfront filing requirements.

NPPR Process

Luxembourg

Luxembourg has implemented one of the most straightforward NPPR registration processes in the EU.Marketing in Luxembourg can commence once US sponsors have prepared and filed a short notification form with the Luxembourg regulator (the CSSF).  Once the marketing notification form has been submitted, marketing in Luxembourg can commence – making Luxembourg one of the simplest EU jurisdictions for US managers to access.

At the date of this article, the CSSF have imposed a registration fee of €2,650 per fund, and an annual fee of €3,000 per fund.

Netherlands

The Netherlands has also introduced a straightforward NPPR process, requiring US managers to complete a relatively short notification form and submit it to the Dutch regulator (the AFM).

In the Netherlands, it is a requirement that the US manager’s home regulator attests to the manager’s regulated status (i.e., that the SEC can effectively comply with its cooperation agreement with the AFM in respect of the AIFM). Generally, local counsel will assist with this requirement.

Currently, there are no registration or annual fees payable in the Netherlands.

Ireland

The NPPR marketing registration process in Ireland requires US managers to prepare and file a short notification form with the Central Bank of Ireland (“CBI”).  The CBI may request proof of establishment of the fund vehicle and evidence of the authorisation of the US manager appointed as the non-EU alternative investment fund manager of the relevant fund.

Currently, there are no registration or annual fees payable in Ireland.

The CBI generally issue NPPR marketing approvals within 2–4 weeks (although we have seen approvals received quicker than this). In Ireland, approval from the CBI must be received before full marketing activities can commence.

How can we help?

Our team is currently working with Paul Hastings to assist with marketing inquiries and registration requirements into the EU and the UK.  Once an NPPR registration is complete, the Apex Group can assist with the ongoing regulatory reporting requirements, known as Annex IV reporting.

For further information, get in touch with our AIFMD reporting team.