Competent authorities may not grant an authorisation unless the following conditions are met:
- they are satisfied that the AIFM will be able to fulfill the conditions of the Directive;
- the AIFM has sufficient initial capital and own funds (see here);
- the persons who effectively conduct the business of an AIFM are:
- of sufficiently good repute; and
- sufficiently experienced in the investment strategies pursued by the AIF that are to be managed by the AIFM;
- the names of those persons (and of every person succeeding them in office) must be communicated to the competent authorities;
- the conduct of the business of the AIFM is directed by at least two persons meeting such conditions (sometimes referred to as the "four eyes" principle);
- the shareholders or members of the AIFM that have qualifying holdings are suitable for ensuring the sound and prudent management of the AIFM; and
- the head office and the registered office of the AIFM are located in the same Member State (Article 8(1)(e)). This requirement may impact on some existing AIFM that have a head office in a different jurisdiction to their registered office. This is a similar requirement to that which already applies under European legislation to insurers and banks, so it may be possible to look at guidance on the application of those restrictions to AIFM.
Authorisation is valid for all Member States.
Restrictions on authorisation
Competent authorities may impose restrictions on an AIFM's scope of authorisation, including as to the strategies that it may pursue.