AIFMD Racer rocks Europe

AIFMD Regulatory Reporting gets European: this would be the perfect way to describe the latest round of reports submitted for asset managers. Why? Because more and more national regulators have opened up their systems to receive AIFMD reports.

Whereas the most recent reporting deadline for fund of funds was mid-February, alternative investment fund managers (AIFMs) for non-fund of funds are already preparing for either the next quarter or – in countries where the reporting deadline has been postponed – for the filing process.

Racer speaks European

While AIFMs in Luxembourg and France have already gone through their first reporting experience – submitting reports to regulators and then responding to the specific checks last quarter – this quarter was the first chance to get to know the IT platforms and specific reporting requirements in countries such as the United Kingdom, Ireland, Belgium and Malta. As a quick learning and flexible IT powerhouse, the KPMG AIFMD Racer evolved into a multiple reporting language speaking machine, able to produce reports across Europe taking into account the specific filing tools, naming conventions and validation checks implemented by the European regulators.

Ireland and Luxembourg: a smooth ride

In Ireland and Luxembourg, it has been fairly plain sailing with regards to the reporting process. Ireland had test sites up and running in advance of the filing deadline, giving both regulators and those reporting a chance to iron out teething problems. At the same time, the Luxembourg regulator became known as a speedy operator when responding to requests and fixing technical issues on their IT system. However, for other countries, the ride has been slightly bumpier …

UK: Racer goes Gabriel

From our experience filing AIFMD reports to Great Britain, we found the process to be quite challenging. Above and beyond the fact that the Financial Conduct Authority (FCA) faced problems with their reporting system – Gabriel – they also asked firms to use an outdated reporting schema with specific validation and import exceptions implemented in the Gabriel system. This meant that companies had to look outside the latest ESMA standard reporting package to amass all the data requirements for report production in the UK. Despite the FCA stating that no action would be taken in case of late submission, the AIFMD Racer was able to produce and successfully submit all required reports within the official target deadlines and meet the very specific checks and requirements implemented by the FCA.

Norway, Germany and the Netherlands: Racer targets Late Bloomer

Whereas the Norwegian regulator has not yet confirmed a deadline for setting up their IT system for the first reporting, the German regulator – BaFin – and its Dutch counterpart – DNB – have postponed the deadline and given managers until March in Netherlands and even until May in Germany to file their first reports. In the Netherlands, filing will be taken to the next level, with specific reporting requirements and import specifications making it a tough journey to produce those country specific reports that will pass the country schemas and validation checks ready for when the reporting system goes live. The good news is that – together with the regulatory knowhow of KPMG – the AIFMD Racer is already setup to produce and translate those regulatory specifications into compliant reports ready for submission to the regulator.

Divergence or convergence?

As the AIFMD was originally set up to provide a harmonized and stringent regulatory supervisory framework for the activities of all AIFMs within the EU, the question remains whether the recent developments in country requirements can be treated as a convergence or divergence between the European supervisory authorities. This is especially true because of the challenging inherent in collecting, sharing and consolidating the reporting information throughout the Union to identify potential sources of risk to the stability of financial markets. Whereas national regulators impose different interpretations and checks on reporting and some even require the filing of outdated versions of reports, the successful filing and adjustments required for each regulator remains crucial for AIFMs to comply with the reporting requirements.

The experience of the last month has proven that AIFMD reporting is a new dimension of regulatory reporting. The challenge of AIFMD reporting can be confronted with the right combination of strong regulatory expertise – covering all European countries – combined with a scalable and flexible technology platform for the report production and dissemination. AIFMD reporting still needs to be digested, while new reporting requirements are already knocking on the door. Stay tuned!

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