MFA Letter to European Commission on Application of EU Securitisation Framework to Non-EU AIFMs

On September 17, 2021 MFA submitted a letter in response to the European Commission’s consultation on the functioning of the EU Securitisation Framework. In the letter, MFA urges the Commission to clarify and confirm that non-EU AIFMs do not have to comply with the due diligence obligations set out in Article 17 of the AIFMD and Article 5 of the SECR with respect to those AIFs that they manage and/or market in the EU.

MFA notes that if a U.S. AIFM that markets its AIFs into the EU were to be subject to the SECR due diligence requirements, that U.S. AIFM would not be able to carry out its investment strategy, since it would not be able to invest in many securitisation transactions. This in turn would result in that U.S. AIFM not marketing such AIFs into the EU. The result of the above is that EU professional investors who wish to obtain exposure to such U.S. (and other non-EU) securitisations will not be able to properly review all the opportunities available, since U.S. AIFMs would decline to present their funds to EU investors. That in turn would negatively affect the competitiveness of the EU’s financial market, which would be contrary to the aims of the EU’s Capital Markets Union project.