Find out how the Memorandums of Understanding (MoUs) are a pre-condition under the Alternative Investment Fund Managers Directive (AIFMD) to allow certain cross-border activities to take place.
Supervisory cooperation arrangements are required for:
- a full scope UK AIFM, or a full scope Gibraltar AIFM, to be able to market an alternative investment fund (AIF) under Regulation 57
- an above-threshold third country AIFM to be able to market under Regulation 59
However, supervisory cooperation arrangements are not required for the marketing of an AIF by a small third country AIFM under Regulation 58.
Our rules also require that a supervisory cooperation arrangement is in place with the relevant jurisdiction whether or not the competent authority supervises the particular entity in question.
High-risk and non-cooperative jurisdictions
The AIFMD also requires that the third country is not listed as a ‘Non-Cooperative Country and Territory’ by the Financial Action Task Force (FATF).
See FATF's list of high-risk jurisdictions[1] subject to a Call for Action.
Our NPPR MoUs
MoUs are designed to help us supervise compliance with the AIFMD requirements when a non-UK entity is involved in the management or marketing of an AIF within the UK, or where the AIF is established in a overseas jurisdiction.
UK AIFMs must not privately place non-UK AIFs in the UK unless the applicable MoU is in place.
It is the responsibility of firms to check whether there is an MoU in place before applying. Not doing so may result in the failure of an application or supervision/enforcement action for breaching applicable rules.
EEA authorities
In February 2019, we agreed a multilateral MoU with EU and EEA National Competent Authorities[2] covering supervisory cooperation, enforcement and information exchange. This MoU came into effect at the end of the transition period.
