AIFMD II: Transposition achieved – implementation has only just begun

As of 16 April 2026, EU Member States were required to transpose AIFMD II into national law.

While this represents a key regulatory milestone, it would be misleading to treat it as the end of the implementation journey. In practice, firms are now operating within a framework that remains partially developed, with important technical details still to follow.

The immediate challenge is not simply understanding the new rules but navigating how they will be applied in an evolving regulatory environment.
 

Beyond the directive: focus shifts to supervisory application

At a high level, AIFMD II introduces targeted refinements rather than a structural overhaul.

The areas of focus are well understood:

• Delegation and substance

• Liquidity risk management tools

• Loan origination

• Enhanced transparency and reporting

However, the significance of AIFMD II lies less in the wording of the directive and more in how regulators will interpret and enforce it.

Firms should expect a more assertive supervisory approach, particularly where operating models rely on cross-border arrangements.

Level 2 measures: incomplete and evolving

A central feature of the current landscape is the incomplete Level 2 framework.

While AIFMD II has been transposed, several key implementing measures remain outstanding:

While certain Level 2 measures (most notably Regulatory Technical Standards (RTS) relating to liquidity management tools) have been finalised and adopted, a significant portion of the AIFMD II technical framework remains outstanding. Further RTS and Annex IV reporting requirements are expected to be finalised by the European Commission by April 2027.

As a result, firms are required to implement AIFMD II without complete technical certainty. This places a premium on adopting approaches that are robust but sufficiently flexible to accommodate future regulatory developments.

Third country AIMFs: heightened scrutiny

AIFMD II does not fundamentally alter access to EU markets for third-country AIFMs. However, it does reinforce the direction of supervisory travel.

Regulators are expected to place greater emphasis on:

• Delegation to non-EU portfolio managers;

• The level of substance within EU AIFMs; and

• The effectiveness of oversight and governance frameworks.

For firms operating international structures, this represents a shift from a rules-based assessment to one focused on credibility and substance.

Operating models that were previously accepted may now face a more detailed challenge.

The UK position: increasing divergence

The Financial Conduct Authority has confirmed that the UK will not implement AIFMD II.

This reinforces the growing divergence between UK and EU regulatory regimes. AIFMs operating across both jurisdictions must now contend with:

• Distinct regulatory frameworks;

• Diverging expectations on delegation and substance; and

• Increased complexity in governance and operating models.

Managing this divergence effectively will be an important consideration for third-country AIFMs that market funds in the UK and EU and UK-domiciled AIFMs that market their funds in the EU.

Implementation timeline: a multi-year process

The implementation of AIFMD II should be viewed as a phased process rather than a single event:

April 2024:
AIFMD II entered into force

16 April 2026:
Deadline for transposition into national law

2026 – 2027:

• Ongoing development and adoption of RTS and ITS

• Publication of further ESMA guidance

2027 onwards:

• Implementation of updated reporting frameworks (including Annex IV)

• Increasing supervisory convergence and scrutiny

AIFMs are therefore required to implement the requirements now while preparing for further change.

How firms are responding

In practice, firms are adopting a range of approaches:

• Delaying implementation pending further clarity;

• Over-interpreting requirements in anticipation of future rules; and

• Taking a targeted approach, focusing on core requirements while maintaining flexibility.

The latter approach is proving the most effective, balancing regulatory compliance with the need to adapt as the framework develops.

How we support firms

AIFMD II presents both a compliance challenge and a strategic opportunity. Our focus is on helping clients navigate both.

End-to-end support: 

From initial impact assessment through to implementation and regulatory engagement, we provide support where it is most needed.

Delegation and operating model review:

We assess whether existing structures, particularly those involving third-country AIFMs, remain robust under increased scrutiny.

Reporting:

We process and submit Annex IV reports on behalf of UK-domiciled and Third Country AIFMs.

Registering funds for marketing/deregistering funds from marketing: 

We support AIFMs in registering their funds for marketing across different jurisdictions, including the UK and EU. We also support AIFMs in deregistering their funds from marketing across different jurisdictions, including the UK and EU.

Fund administration, depository and host AIFM services:

We provide fund administration, depository and host AIFM services.

Looking ahead

AIFMD II represents a continuation of the EU’s focus on substance, oversight, and supervisory convergence.

Although the transposition deadline has now passed, the regulatory framework is still evolving. AIFMs that respond effectively will be those that adopt a structured, forward-looking approach, balancing immediate compliance with longer-term adaptability.