On 11 November 2010 the European Parliament voted in favour of a compromise agreement proposed by the Belgian presidency for the Alternative Investment Fund Managers EU Directive (AIFMD). The compromise text that was accepted contains a dual system that would eventually allow for an EU passport for non-EU based managers, such as those established in Jersey. This important decision has confirmed that national private placement regimes for third country (non-EU) alternative investment funds and managers will be in place for at least five years after the implementation of the Directive, subject to minimum harmonisation obligations. It is likely that the AIFMD will come into force across the EU in early 2013. The AIFMD, however, does not regulate passive marketing of funds, meaning that existing funds will be able to continue dealing with their investor groups. This remains an alternative route for institutional investors in Europe seeking to access the leading non-European asset managers. Geoff Cook, Chief Executive of Jersey Finance, commented: “Following the vote by the European Parliament on the AIFM Directive, Jersey is pleased to confirm that it will meet the agreed criteria for ongoing market access into Europe. This is fantastic news for our funds industry, and removes any uncertainty that has existed in the market place while the Directive was under discussion. Jersey is also confident that it will be among the first jurisdictions to obtain a passport for non-EU alternative investment funds and managers, when it is introduced in 2015. Additionally, the appropriate regulatory regime that Jersey offers means a number of established asset managers have chosen to relocate here in the last twelve months.” There will be a phased introduction of a passport for non-EU alternative investment funds and managers from 2015. The islands are confident that they will satisfy regulatory requirements to enable access to EU institutional investors through the passport regime. Whilst this will ultimately broaden the distribution channels for existing and new fund products, it will be important for both EU and Non-EU fund managers, administrators and other funds service providers to examine the operational consequences of the Directive on their business models. For further information on the use of Jersey funds, contact Kate Anderson (kateanderson@voisinlaw.com) of Voisin, or for information on Volaw’s fund administration services, please contact Trevor Norman (tnorman@volaw.com), Director of Funds and SPV Group.