Bursting Through the Red-Tape: Why Rightsizing Private Equity Regulations Would Ease Compliance Burdens — and Spark More Growth in the Industry Part 2(of 3): Looming regulatory challenges in Europe

While U.S. firms have faced expanded regulatory scrutiny in recent years, European fund managers have an equally challenging task to confront as 2018 approaches. In addition to current laws, major new regulatory directives are poised to take effect within the same calendar year — a circumstance that requires firms to prepare diligently while thinking two steps ahead.

The Alternative Investment Fund Managers Directive is the most significant legislation impacting the European private equity industry. In order to remain compliant, firms must update their internal organizational requirements and documentation while also training business and compliance teams.

The upcoming Markets in Financial Instruments Directive (MiFID II) will also have some effect on all private equity enterprises, though the extent of this impact depends on the regulatory classification of each firm. Firms operating under MiFID II must now have LEIs in place to report transactions across all asset classes, rather than merely derivatives — a change that goes into effect on Jan. 3, 2018.

The General Data Protection Regulation (GDPR) represents the largest overhaul of privacy regulations in a generation. Firms that process the data of European Union citizens (even if those firms aren’t based in Europe) must deal with significant new regulations designed to safeguard privacy. These changes become law on May 25, 2018.

Ian Bone is the Senior Manager of Strategy & Innovation at CT Corporation, a legal services & compliance provider and recipient of the 2017 Deal Partner of the Year award from ACG NY in recognition of the 13,000 merger filings and 1.2M due diligence inquiries they handled the previous year. He is a member of the ACG New York Board as well as the Programming Committee. A finalist for 2017 Thought Leader of the Year from AM&AA and an ACG New York member since 2014, Mr. Bone has also continued in his role as Chair of the Champions Awards Gala and Vice Chair of the ACG University Committee.

Read Part 3


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