AIFMD II vs AIFMD I: The 5 Changes That Actually Matter

Why Compare AIFMD I and II?

The Alternative Investment Fund Managers Directive came into force in 2011. For over a decade, compliance teams built workflows around the same core obligations: register with your NCA, file Annex IV reports, comply with transparency and marketing rules. Then came AIFMD II — Directive (EU) 2024/927 — and everything got more complex.

If you're managing a fund in the EU today, you need to know what changed. Below are the five areas where the practical impact is most significant.

1. Loan Origination Rules (The Biggest Practical Change)

Before AIFMD II, there were no specific EU-wide rules governing how AIFs could originate loans. National regulators had their own guidance, but there was no harmonised standard. AIFMD II introduced Article 9(2a) to close that gap.

The new rules require that any AIF that is a creditor under a loan originated after the directive's application date must be a registered credit institution or an AIF whose only investors are professional investors and which is fully funded by a credit institution loan. In plain terms: if you're a fund that originates loans, you need either a banking licence or a structure where professional investors fully capitalise the lending.

For direct lenders and credit funds, this is a structural change, not a paperwork change. Some existing fund structures will no longer be permissible under AIFMD II.

2. Reporting Thresholds: Bigger Funds, More Reporting

One of the most cited changes in AIFMD II is the revised threshold for the Art. 3 notification regime. Under AIFMD I, managers with AUM below €100M could opt into a lighter registration regime. AIFMD II raised that threshold and introduced a new intermediate band.

The practical effect: managers who were previously in the "annual filing" bucket may now face semi-annual or quarterly obligations. This also means your Annex IV reporting pipeline needs to handle more frequent submissions with more data fields.

3. Annex IV: More Fields, Stricter Validation

The Annex IV report itself expanded under AIFMD II. ESMA updated the XML schema to capture new data points, and NCAs updated their intake validation rules. The headline changes in the report:

• New fields for loan origination AIFs (creditor details, loan book composition)
• Enhanced leverage calculation methodology (Gross and Commitment method both reported)
• Updated portfolio composition fields for funds with illiquid assets
• Additional beneficial ownership information for feeder structures
• New Art. 9(3) liquidity tool disclosures (see section below)

If your reporting system was built for the 2013 ESMA schema, it likely won't validate against the 2024/2025 schema without updates. Rejected filings lead to late submissions, and late submissions lead to regulatory inquiries.

4. Liquidity Management Tools: New Options, New Disclosures

AIFMD II introduced a minimum set of five liquidity management tools that NCAs can require AIFs to make available to investors. These go beyond the original AIFMD's focus on redemption gates and notice periods.

• Swing pricing — adjusts the net asset value to pass on dilution costs to transacting investors
• Anti-dilution levies — fees charged to incoming investors to protect existing unit holders
• Redemption gates — limits on the percentage of assets that can be redeemed in a given period
• Suspension of redemptions — temporary suspension of the right to redeem (already existed under AIFMD I)
• Side pockets — segregation of illiquid positions into a separate share class

Under AIFMD II, you must disclose which tools your fund uses in the Annex IV report. If you use none, you must state that as well. Regulators are specifically watching whether managers have adequate pre-commitment to liquidity tools before they're needed — not after.

5. Delegation and Substance Requirements

AIFMD I already had delegation rules, but they were widely criticised for enabling "letterbox" entities — fund managers based in one jurisdiction with all investment decisions made elsewhere. AIFMD II responds with stricter substance requirements.

The new rules require that AIFMs which delegate portfolio management or risk management functions must demonstrate that the delegate has the appropriate resources, expertise, and independence to carry out those functions. Your NCA will scrutinise delegation arrangements more carefully during registration renewals and thematic reviews.

Practical implication: if your fund's investment decisions are made in a different country from where your AIFM is registered, be prepared to document why — and have the correspondence, meeting records, and decision logs to back it up.

What to Do in the Remaining 29 Days

April 16, 2026 is the transposition deadline for most EU member states. Here's your action list:

1. Audit your fund structure against the loan origination rules. If you originate loans, confirm your legal structure is AIFMD II-compliant.
2. Check your reporting threshold. Did you move into a higher filing frequency band under the new thresholds?
3. Update your XML pipeline. Ensure your Annex IV XML schema is the 2025 ESMA version. Validate before submitting.
4. Document your liquidity tools. If you use any of the five tools, make sure the disclosure is in your next filing. If you use none, note that too.
5. Review delegation arrangements. Pull together the documentation that demonstrates substance in your delegate relationships.