By Sarah Bartram-Lora Reina, Head of Clients and Intermediaries, Jersey, and Matt Satchell, Client Relationship Director, Fund and Asset Managers, Jersey
Any alternative fund players operating anywhere near Europe will surely be aware of the imminent implementation of amendments to the EU’s Alternative Investment Fund Managers Directive – known as AIFMD 2.
While AIFMD 2 entered into force on 15 April 2024, the fast-approaching 16 April 2026 is when all EU member states must have transposed the Directive into national law.
As a leading jurisdiction for alternative investment funds, Jersey keeps a close eye on relevant regulatory changes in the UK and Europe, including AIFMD 2. Although Jersey is a third country, it relies on alignment with EU and UK AIFMD regimes to maintain market access for Jersey-domiciled funds through national private placement regimes (NPPRs).
A review of the AIFMD 2 amendments has been made against Jersey’s current regulations and relevant legislation for alternative investment funds (AIFs) and alternative investment fund managers (AIFMs). The revised Directive mainly increases regulatory standards for EU AIFMs and EU AIFs, but some changes impact non-EU (e.g. Jersey) managers who market into the EU.
Following this review, it was determined that Jersey’s revised AIF Code of Practice will:
- Update Jersey’s AIFM regime to reflect EU AIFMD 2 and UK AIFM reforms to maintain market equivalence
- Align Jersey’s disclosure and reporting requirements where necessary for NPPR access, particularly under Article 42 of AIFMD
- Insert updated definitions, clarify regulatory expectations, and incorporate expanded investor protection and transparency provisions
Key impact areas for Jersey AIFMs and AIFs
Enhanced Annex IV reporting
AIFMD 2 expands the regulatory data that must be provided when a Jersey fund is marketed in an EU/EEA state.
New or expanded disclosures include:
- Fees and expenses borne directly or indirectly by the AIF/AIFM
- Leverage usage, types, sources, associated risks, and restrictions
- Liquidity risk management practices
- Redemption procedures
- Details of loan origination portfolios (if applicable)
- Information on any SPVs, subsidiaries or parent entities connected to the AIF’s activities
Additional pre-investment and ongoing investor disclosures
Investors must now receive more detailed information at subscription and on an ongoing basis, particularly regarding:
- Cost transparency
- Liquidity tools
- Leverage and risk management
- Conflicts of interest reporting
Areas of limited or no impact
Liquidity management requirements (LMTs)
While full mandatory liquidity tool frameworks apply only to EU open-ended AIFs, non-EU AIFMs (including Jersey) must still disclose information on:
- Liquidity management arrangements
- Redemption processes
Loan origination funds – limited impact for Jersey
AIFMD 2 contains detailed, prescriptive rules for EU loan-originating AIFs, but these do not apply to Jersey AIFMs unless the fund structure itself engages in EU regulated loan origination activities. For Jersey funds marketed into the EU, the key new requirement is expanded reporting rather than conduct rules.
Delegation requirements – no change for Jersey
AIFMD 2 strengthens EU AIFMs’ delegation oversight, but these changes do not affect Jersey AIFMs under Jersey’s AIF Code.
Depositary regime – not applicable to Jersey funds
AIFMD 2 introduces new conditions enabling EU funds to appoint depositaries outside their home state.
This does not affect Jersey funds, which are not required to appoint an EU-style depositary unless an individual EU member state’s NPPR mandates one.
It’s anticipated that further changes will be made next year to the AIF code of practice for UK AIFMs. The UK government consulted in June 2025 on similar provisions and will be issuing their draft rules implementing the UK AIFM proposals in the first half of next year, under consultation. Once these changes are known, going forward the Jersey AIF Code will effectively be split into two parts, one for EU AIFMD and the other for UK AIFM.
The Jersey Financial Services Commission (JFSC) emphasises that Jersey’s dual regime model (EU equivalent + UK equivalent AIFM regimes) will continue, ensuring uninterrupted access to both UK and EU investor markets.
Practical actions for impacted fund managers: your checklist to remain compliant
- Review the upcoming Code revisions
- Map expanded AIFMD 2 disclosure / data reporting requirements across:
- Annex IV reporting
- PPM/IMAs
- Investor communications
- Update investor disclosure templates to include new cost, liquidity, leverage and SPV-related disclosures
- Assess internal data capture systems for expanded Annex IV reporting
- Ensure EU NPPR filings reflect AIFMD 2 updates in relevant member states
- Monitor JFSC final rule changes (expected before the 16 April 2026 effective date)
- Engage with fund administrators and EU counsel to confirm country-specific NPPR changes
What should Jersey AIFMs do next?
The AIFMD–driven updates to the Jersey AIF Code are targeted and incremental, ensuring Jersey maintains seamless EU/UK market access through NPPRs while avoiding the full regulatory burden imposed on EU AIFMs.
Jersey AIFMs will primarily need to prepare for expanded reporting and disclosure obligations, rather than substantive changes to operations or governance frameworks.
How we can help
At IQ-EQ, we have extensive experience working with fund managers that operate and market both non-EU and EU AIFs.
To find out more about our Jersey team’s expertise and our comprehensive suite of fund and regulatory compliance services, please don’t hesitate to get in touch.
