MFA Submits Comments to UK Financial Conduct Authority Regarding Guidance on Remuneration Provisions of AIFMD (with Lofchie Comment)

The Managed Funds Association ("MFA") submitted comments to the UK Financial Conduct Authority ("FCA") regarding the proposed guidance on implementing the remuneration provisions of the Alternative Investment Fund Manager's Directive ("AIFMD"). In the comment letter, the MFA encouraged the FCA to:

• limit the remuneration provisions to EU Alternative Investment Fund Managers ("AIFMs") and not extend the rules to delegates of EU AIFMs;
• amend the FCA's suggested implementation approaches to determine what payments are made in connection with a person's ownership interest in an AIFM to better achieve the stated principle of excluding such payments from the remuneration rules; and
• ensure that the deferral requirements in the rules take into account tax implications for AIFM employees in the relevant jurisdictions of covered employees.

Lofchie Comment:Even if one believed that payments to bank employees should be limited, it is hard to understand how one would extend that policy rationale for regulating what hedge fund advisers paid their employees. The analogy between a bank, which takes public deposits and often has government insurance, and a hedge fund adviser, which does neither of those things, is pretty strained.

See: MFA Comment Letter.