AIFMD passport: Europe must try harder

Purpose To explain two papers published by the European Securities and Marketing Authority (ESMA) covering the application of the mar-keting “passport” under the Alternative Investment Fund Managers Directive (AIFMD). Design/methodology/approach Explains ESMA’s first paper, containing an advice to the European Parliament, Council and Commission (collectively the Trilogue) on the potential application of the AIFMD passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative in-vestment Funds (AIFs), and a second paper, containing ESMA’s opinion on the current functioning of the AIFMD (currently used by EU AIFMs marketing EU AIFs in the EU) and National Private Placement Regimes (NPPRs, used for marketing by non-EU AIFMs and non-EU AIFs). Findings The ESMA papers were disappointing because they gave far less guidance and encouragement than anticipated that AIFs located in major jurisdictions such as the US and the Cayman Islands will be any easier to market to EU professional investors in the near future. Practical implications AIFMs (both inside and outside the EU) who are already using, or intending to use, the NPPRs should take some comfort that it seems highly unlikely that these regimes will be removed in the near future. Originality/value Practical guidance from experienced financial services lawyers.