Regulation

An EU directive governing managers of alternative investment funds. Prompted by concern over a large, unregulated hedge-fund industry, it became wide-reaching legislation covering managers of all previously unregulated funds, large and small.

It regulates marketing of AIFs to professional investors in the EU. Once licensed in one country, marketing in another is subject only to a simple notification - the "passport of marketing." As Norway has not fully implemented the directive, Norwegian managers cannot yet use the passport and may have to follow national private placement rules. The directive became law in most of Europe in July 2013, and in Norway from 1 July 2014.

Regulation to prevent transactions that launder the proceeds of crime. Norway's Anti-Money Laundering Act was introduced in 2009; firms must keep up-to-date certified proof of identity for new clients, store customer information securely, research and report suspicious circumstances to the authorities, and maintain proper internal control and communication procedures.

In practice, a legal entity is identified by an up-to-date certified certificate of registration, with signatories providing certified passport copies and proof of address. Owners are identified via a certified shareholder register; any corporate shareholder holding more than 25% must provide its own register, and so on, to identify the ultimate beneficial owners.

Under AIFMD, the fund manager must ensure a depositary function is appointed for each alternative investment fund.

The depositary is a separate, independent control entity focused on safekeeping of fund assets, liquidity management, and monitoring the fund's activities to ensure they stay within its mandate and agreements.

Operating in adherence with formal laws and regulations. In companies with a dedicated compliance function, the compliance office reports directly and independently to the board.

The International Compliance Association also recognises a secondary level: ensuring the organisation operates in line with internally imposed control systems designed to secure compliance with formal law - often functionally part of risk management.

US legislation giving the United States greater ability to find and tax US citizens and companies. It requires non-US financial institutions to report on US account holders and beneficial owners to US tax authorities.

Originally aimed at foreign institutions operating in the US or with US clients, FATCA in some cases conflicted with national laws, leading to numerous Intergovernmental Agreements; most countries now accept FATCA reporting.

An independent EU authority safeguarding the stability of the EU financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets and enhancing investor protection, in particular by fostering supervisory convergence among securities regulators.

A global, member-driven organisation advancing the interests of private equity Limited Partners through education, independent research, best practices and collaboration. Its Private Equity Principles are commonly used in negotiating partnership agreements to align LP and GP interests.