AIFMD National Private Placement Regime (NPPR)
Sturgeon Ventures leading Regulatory Umbrella services provider launches a facility to register funds in the United Kingdom with the FCA (Financial Conduct Authority) and other jurisdictions under NPPR for AIF (s)
The AIFMD National Private Placement Regime (NPPR)
The AIFMD National Private Placement Regime (NPPR) is a mechanism to allow the marketing by Alternative Investment Fund Managers (AIFMs) of Alternative Investment Funds (AIFs) that are not allowed to be marketed under the AIFMD domestic marketing or passporting regimes. This principally relates to the marketing of non-EEA AIFs and AIFs managed by non-EEA AIFMs or by UK Small AIFMs. However, it also relates to the marketing of feeder AIFs where the master AIFM is a non-EEA AIFM or the master AIF is a non-EEA IF.
To be able to market under NPPR, the AIFM needs to satisfy a number of conditions, as detailed in regulations 57, 58 and 59 of the UK Alternative Investment Fund Managers Regulations 2013 (the Treasury’s Regulations). For example, for full-scope AIFMs, there needs to be a memorandum of understanding on supervisory co-operation arrangements (MoU) between the UK (or EEA member state in the case of an EEA AIFM) and each relevant non-EEA competent authority. For further details of the current status of MoUs see FCA’s latest news. Another condition for non-EEA AIFMs is that the AIFM is the person responsible for complying with the implementing provisions relating to the marketing of the AIF.
NPPR is available to the following managers from 22 July 2013:
- UK and EEA AIFMs marketing non-EEA AIF(s) (or feeder AIFs that are UK AIFs or EEA AIFs where the master AIF is a managed by a non-EEA AIFM or is a non-EEA AIF); and
- non-EEA AIFMs marketing AIF(s), whether UK, EEA or non-EEA AIF(s).
The above managers will be able to continue to use NPPR until at least 2018, and until 2015 NPPR will be the sole regime available to those managers wishing to market in the EEA. After 2015, a non-EEA marketing passport may be introduced, but this depends on a number of conditions being satisfied (as set out in the Directive).
To use NPPR in the UK, the above managers must notify the FCA if they intend to market the types of AIF listed above. The notification requires confirmation from the AIFM that the management of the AIF complies with the relevant conditions set out in the Treasury’s Regulations. These conditions vary for non-EEA AIFMs depending on whether the AIFM manages assets that are above or below the size threshold set out in the Treasury’s Regulations. As a result of marketing an AIF in the UK under NPPR, the requirements that an AIFM is subject to may change.
Notification forms for all categories of firm can be found in the Forms section below.
The Treasury’s Regulations include transitional arrangements, which mean that AIFMs that benefit from the transitional will not need to comply with NPPR until 22 July 2014 or, if earlier, until the date the firm is authorised as an AIFM (in the case of a UK or EEA AIFM), or the date that the FCA has received a marketing notification from the AIFM (in the case of a non-EEA AIFM).
Further details on NPPR can be found in FCA’s handbook FUND 10.5 (National Private Placement).
- Article 36 form – For UK and EEA AIFMs marketing non-EEA AIF(s) (or feeder AIFs that are UK AIFs or EEA AIFs where the master AIF is a managed by a non-EEA AIFM or is a non-EEA AIF)
- Article 42 form – For above-threshold non-EEA AIFMs marketing AIF(s), whether UK, EEA or non-EEA AIF(s). These AIFMs will also be required to complete a notification in respect of major holdings and control acquired after the date of their marketing notification (in accordance with Part 5 of the HMT regulations) by submitting it to the email address below.
- Small Third Country form – For sub-threshold non-EEA AIFMs marketing AIF(s), whether UK, EEA or non-EEA AIF(s).
- The FCS have published a guidance note to assist firms with the completion of each of the forms above.
Please note that forms may be subject to version updates. Firms should ensure they have completed the latest version of the relevant form before submitting a notification.
Please email your completed NPPR notifications to: NPPRMarketingNotification@fca.org.uk.
You can use the template to notify the FCA of multiple funds, however, only one notification file should be submitted per email, so if you are submitting more than one file, please send these on separate emails. The FCA will send you an email to confirm they have received your notification; please do not reply to this email as it is sent from an unmonitored email address.
The subject line of the email should contain your FRN (or firm name for new applications and non-UK firms) followed by the words ‘AIFMD NPPR Notification’.
If you have any queries regarding the submission of your data, please send your query to: AIFMDQueries@fca.org.uk
Frequently asked questions
Q1: What will happen once I have submitted a notification?
The FCA will send you an email to confirm receipt of your notification; please do not reply to this email as it is sent from an unmonitored email address. If the FCA are unable to process your notification they will inform you of the reason why and ask you to resubmit. The FCA will inform you once your notification has been successfully processed. At this point the FCA will issue you with a notification number and ask you to submit a cheque, in GBP that is pounds sterling, for payment in full. Please write the notification number on the back of your cheque and send it to: NPPR Notifications, Fund Authorisations Department, Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.
Q2: When will a firm be able to start marketing once a notification has been submitted to the FCA?
Under regulation 50 of the HMT regulations a firm will be entitled to start marketing AIFs under NPPR from the point at which it has submitted its notification. However, the FCA will send out an automated response confirming that the original notification has been successfully processed and firms may wish to wait until this confirmation is received before starting to market.
Q3: What are the FCA’s proposed application fees for AIFs marketed in the UK under national private placement?
Please refer to the FCA’s AIFMD fees page.
Q4: What happens if I have sent my data to the wrong email address?
It is important that you send your data to the correct email address as you may put your data at risk. You will receive confirmation by email that you have submitted your data. If you do not receive a confirmation, it is likely that you have sent your data to the wrong email address. If so, you will need to resubmit the report to the following mailbox: NPPRMarketingNotification@fca.org.uk.
Q5: Can I send my data encrypted?
Yes. You may send your data encrypted, by using the FCAs PGP Key.
Q6: What happens if I do not submit this data?
If the required data is not submitted then your firm will not be able to take advantage of the National Private Placement Regime for AIFMD. There are some transitional provisions in place which may allow firms to continue to market AIFs until 21 July 2014 (at the latest). However, firms must provide notification by 21 July 2014 otherwise, after this date they will no longer be able to market their AIFs.
Q7: Which software should I use to open the template and submit the file?
The FCA have tested their templates with Microsoft Excel 2010 and 2003.
Q8: What happens if I have not received any acknowledgement of my notification?
For all notification emails successfully received, an automated response will be sent to the sender. If you have not received the automated response then the notification has not be received by the FCA. The FCA would request that you resubmit your notification email to: NPPRMarketingNotification@fca.org.uk
Q9: What will happen to an application if the relevant cooperation arrangements (MoUs) are not in place with a non-EEA competent authority?
It is the responsibility of the firm to check whether there is an MOU in place before applying, as not doing so may result in the failure of an application or supervision/enforcement action for breaching applicable rules.
Q10: What is the maximum number of AIFs that can be entered into the notification forms?
You can only enter up to 50 AIFs on each of the notification forms. If you have more than 50 AIFs that you wish to notify the FCA of, you may submit more than one form.
Q11: Will the UK treat the National Private Placement Regime any differently than other EEA Member States?
It is not known exactly how NPPR will be treated in other EEA states. It is the responsibility of firms to understand the position of other EEA States. There are law firms offering this type of advice, Sturgeon will be offering information as it is transposed by each country, please send an email to firstname.lastname@example.org to be on the update list
Q12: When are supervisory cooperation arrangements required?
Supervisory cooperation arrangements are required for a full scope UK AIFM or a full scope EEA AIFM to be able to market an AIF under Regulation 57 (Article 36) and for an above-threshold non-EEA AIFM to be able to market under Regulation 59 (Article 42). However, supervisory cooperation arrangements are not required for the marketing of an AIF by a small non-EEA AIFM under Regulation 58 (refer to the Treasury’s Regulations for further details).
Q13: Is a supervisory cooperation required if the AIF or AIFM is not supervised in the relevant third country?
Yes, supervisory cooperation arrangements are required if the AIF is being marketed under Regulation 57 or Regulation 59.
If the AIF or AIFM is not supervised in the third country, there needs to be a supervisory cooperation arrangement with a supervisory authority in that jurisdiction. This will ensure that the FCA, and (where the AIF being marketing is an EEA AIF) the other relevant EEA competent authority, is able to carry out its duties in accordance with AIFMD.
If there is only one supervisory authority that supervises AIFMs/AIFs in a particular jurisdiction, the AIFM should select this authority for the purposes of completing the NPPR notification form.
If there is more than one supervisory authority that supervises AIFMs/AIFs in a particular jurisdiction and there is a cooperation arrangement with all of these authorities, the FCA will deem the requirement with respect to supervisory cooperation arrangements to be satisfied and the AIFM should select the most appropriate authority. However, if there is more than one supervisory authority that supervises AIFMs/AIFs in a particular jurisdiction and there is a cooperation arrangement with some but not all of these authorities, the AIFM needs to assess whether there is a cooperation agreement with a supervisory authority that enables the FCA (and, if applicable, the other relevant EEA competent authority) to carry out its duties in accordance with AIFMD.
Financial Promotion: Please note that this is not legal or regulatory advice and this information has been taken from www.fca.org.uk’s website, in November 2013.
Sturgeon Ventures LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Today Sturgeon Ventures LLP is a MIFID firm and is using transitional position for all the AIFs it manages and is a sub-advisor to both EU and Non EU funds. However Sturgeon does have a joint venture with a Full EU AIFM, and can structure a solution for you. Sturgeon is the pioneer of the Regulatory Umbrella known also as Regulatory Hosting and FCA Regulatory services. www.sturgeonventures.com
Sturgeon Ventures LLP has been incubating firms and persons since 1999, further information on NPPR or the AIFM Solutions whether you are a startup, or an established fund or manager in or outside of the EU please email email@example.com.