Disclosure and reporting

AIFMD disclosure and reporting

AIFMD requires AIFMs to make pre-sale and periodic disclosures. AIFs must provide an annual report.

AIFMD requires pre-sales and period disclosures as well as an annual report.

Alternative investment fund managers (AIFMs) are required to make available certain information to investors before they invest in an alternative investment fund (AIF). Thereafter, certain periodic disclosures must be made.  The directive details the disclosures required but does not prescribe the format for delivering this information.

The pre-sale disclosures include:

  • the AIF’s investment strategy and objectives, types of assets, investment techniques and associated risks, investment restrictions, types and sources of leverage, any collateral and re-use arrangements, valuation and pricing procedure
  • how changes to the investment strategy or policy are made
  • latest NAV and performance
  • procedure for the issue of units/shares
  • identity of the AIFM, depositary, prime broker, auditor, service providers, delegates
  • any contractual discharge of liability by the depositary
  • liquidity risk management and redemption rights in normal and exceptional circumstances
  • maximum fees, charges and expenses
  • And fair treatment of investors and any preferential treatment for an investor group.

Periodic disclosures include:

  • liquidity arrangements
  • current risk profile of the AIF and the main features of the AIFM’s risk management system
  • and total amount of leverage and any changes to the maximum level of leverage.


Each AIF must make available an annual report, prepared in accordance with the accounting standards in its Member State of establishment and audited by an approved auditor. The annual report must also provide information on the total amount of remuneration, split between fixed and variable components, paid by the AIFM to its staff and the aggregate amount of remuneration broken down by senior management and risk takers.

AIFMs are also required to provide extensive and regular reporting to national regulators on each AIF managed. The national regulators pass on aggregated information to ESMA. The frequency of reporting is quarterly, with semi-annual reporting for AIFMs with AIFs of less than €1 billion assets under management where no one AIF managed is over €500 million.

The reports include:

  • the principal markets and instruments traded by the AIF
  • the main categories of assets held by the AIF, including principal exposures and concentration
  • the percentage of assets subject to special arrangements due to illiquidity, any new liquidity arrangements and results of liquidity stress tests
  • risk profile of the AIF, risk management systems employed and results of stress tests
  • and for AIF using leverage on a substantial basis, the level of leverage, identification of the five largest sources of leverage and of the five largest sources of borrowing cash/securities, and the extent that assets are re-used under leveraging arrangements.

The regulation specifies two mandatory methods for calculating leverage and prescribes the format of the report. European Securities and Markets Authority (ESMA) has issued various FAQs, providing technical answers to various questions arising from the industry during implementation.

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