AIFMD implementation has been successful, but global asset management industry casts doubt over AIFMD's ability to spot future threats, according to the results of Multifonds’ survey.

Respondents from the funds industry, who collectively manage and administer assets exceeding $16trn and $20trn respectively, have expressed doubts as to the purpose of the regulatory data collected from AIFMD and question whether it is helping regulators to better spot threats and systemic risks that may impact market stability.

In the survey on the impact of the Alternative Investment Fund Managers Directive (AIFMD) on the fund industry, the majority of respondents (56%) expressed uncertainty as to how regulators would use all the data collected from AIFMs.

Furthermore, less than a quarter (23%) believe that AIFMD actually enables regulators to better identify threats to market stability.

In this year since implementation that has seen the majority of AIFMs complete their registration and authorisation process and submit their first sets of Annex IV reports, regulatory reporting has presented the biggest challenge, with the proportion of respondents citing regulatory reporting as their biggest concern rising to 81%, up from 66% in 2014.

While the usefulness of AIFMD and its reporting burden is still in question, the consensus within the industry is that local regulators have been successful in their introduction of the Directive, with 85% agreeing that it has been well implemented.

Encouragingly costs and in particular, depositary costs have also stabilised in line with expectations.
The majority (56%) have experienced an increase in depositary costs of less than 2.5bps.

This is in line with the industry predictions made in Multifonds' 2014 survey, when nearly half (49%) expected depositary costs to be lower than 2.5bps but in stark contrast with earlier estimates (in 2013) that predicted depositary costs could rise by up to 100bps.

Keith Hale, Multifonds' executive vice president for client and business development said: “While it is encouraging the fund industry believes AIFMD has been successfully implemented, it is now on the shoulders of regulators to demonstrate the real value of the extensive efforts made by fund managers and administrators to comply with the Directive.”

“With regulatory reporting clearly an increasing concern across the board, it is crucial that regulators vocalise the importance of AIFMD and clearly outline how the data will be used, otherwise it will be at risk of being perceived merely as an administrative or bureaucratic burden with little tangible value,” he said.

The global fund industry also expects AIFMD to become a global brand to rival UCITS, with the overwhelming majority (87%) believing AIFMD will come to rival UCITS as a 'de facto' international standard for distributing AIFs.

This is significantly more than the figure in Multifonds' 2014 survey, when just over half (54%) thought the same.