The European Securities and Markets Authority (ESMA) has updated its Question and Answers (available here), relating to the application of the Alternative Investment Fund Managers Directive (AIFMD), Directive 2011/61/EU.
ESMA added a new question under Section XI of the Q&As which clarifies whether managers of undertakings investing in crypto assets are or not subject to the AIFMD. According to ESMA, this should be assessed on a case-by-case basis, while market participants and national competent authorities (NCAs) should pay attention to the guidance provided in the ESMA Guidelines on key concepts of the AIFMD.
In particular, collective investment undertakings raising capital from a number of investors to invest in crypto assets in accordance with a defined investment policy for the benefit of those investors
will qualify as ‘AIF’ in accordance with Article 4(1)(a) of the AIFMD.
As the AIFMD does not provide a list of eligible or non-eligible assets, AIFs may in principle invest in any traditional or alternative assets, as long as, the AIFM can ensure compliance with the AIFMD. However, more specific investment and risk diversification requirements for AIFs investing in crypto assets, as well as, limitations regarding the target investors of such AIFs may exist at national level.
Lastly, ESMA via its updated Q&As reminded market participants and investors of the high risks involved in investments in crypto-assets (relevant is also the joint ESMA, EBA and EIOPA warning dated February 2018 (accessible here).
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