Sector Brief to AIFM-light Managers

Stichting Autoriteit Financiële Markten
Kamer van Koophandel Amsterdam, nr. 41207759
Reference of this letter:
Visit address Vijzelgracht 50
Postbus 11723 • 1001 GS Amsterdam
Telephone +31 (0)20-7972000 • www.afm.nl
AFM - Public
Ref. J.H.V
Sector Brief Date 30 June 2025
Your reference FeJg-25067898
Email Ondernemersloket@afm.nl
Subject: Sector Brief AIFM-light population

Dear Management,

The Authority for the Financial Markets (AFM) has conducted an exploratory investigation (the Investigation) into fund managers with an AIFMD registration (the so-called 'light managers' as referred to in Article 2:66a of the Financial Supervision Act (Wft)).1 Through the Investigation, the AFM has gained more insight into this population.2 Additionally, the AFM examined the risks present within this market segment. One of the main findings of the Investigation is that a number of standards are not being followed or are being followed incorrectly. With this letter, the AFM communicates what it expects from you as a light manager and emphasizes that it is essential for you as a light manager with a registration to continuously comply with the applicable standards.3 The AFM advises you to carefully study the findings in this letter and verify whether you meet the requirements for light managers and the associated expectations of the AFM.

The following topics are addressed in the letter: the AIFMD reporting obligation, the definition of retail versus professional investor, the preparation and provision of the Key Information Document (EID), the use of the <150 persons retail condition, Wwft and Sw obligations, the own responsibility of light managers, and the deregistration of light managers and their funds. In the attachment, you will find some practical tips and links to sources for consultation.

AIFMD Reporting Obligation

Light managers are obligated to provide information to the AFM annually regarding the main financial instruments in which they trade, the main risk positions, and the key concentrations of the investment vehicles they manage (the 'AIFMD report').4 Using the data from the AIFMD report, the AFM can map systemic risks of (managers of) investment vehicles. The AIFMD report thus forms an important instrument for the AFM's supervision. It is therefore important that you report to the AFM in a timely, correct, and complete manner.

The AFM has observed that not all light managers comply with the obligation to provide this information (in a timely manner).5 Failure to submit the AIFMD report (in a timely manner) constitutes a violation of Article 2:66a, third paragraph, sub b, of the Wft. The AFM has the possibility to take measures against light managers who do not comply with the AIFMD reporting obligation. Light managers who have not yet submitted the report for the calendar year 2024 were notified of this violation by letter on 30 April 2025.

Definition of Retail vs. Professional Investor

When registering a fund, a light manager must indicate whether the fund is offered to professional investors and/or non-professional investors (retail investors). Professional investors are investors presumed to possess the knowledge, experience, and expertise to make their own investment decisions and assess the associated risks. This includes parties such as banks, investment firms, pension funds, national governments, and large enterprises. Retail investors are investors who are not classified as professional. These include, for example, natural persons, small companies, and small and medium-sized enterprises. Additional conditions apply for offering to retail investors to ensure the protection of retail investors. The distinction between these categories of investors is therefore of great importance.

An example of an additional condition is the obligation to prepare and provide a Key Information Document (see below) to (potential) retail investors. The AFM therefore expects a light manager to be capable of making this distinction.

In the Investigation, the AFM observed that this distinction is not always correctly interpreted by light managers. For instance, some light managers believe that wealthy individuals can be regarded as professional investors or that retail investors can declare themselves as professional, which is not possible in any case. If there is an investment in a light fund, a natural person can never be a professional investor. For the definitions of non-professional investor and professional investor, the AFM refers to Article 1:1 of the Wft.

Key Information Document (EID)

Offerers of retail investment products (or insurance-based investment products) to retail investors have the additional obligation to prepare and provide the Key Information Document (EID) to potential investors. This obligation also applies to light managers who offer a fund to retail investors. This document helps investors understand and compare the offered products. This gives them better insight into the nature of the offered product, such as the strategy, risks, costs, and expected return.

The PRIIPS Regulation6 requires offerers of investment products (including light managers) to provide the EID to retail investors in a timely manner, namely before they are given the opportunity to invest. To comply with this requirement, light managers must publish the EID on the website of the light manager7 before potential investors are given the opportunity to invest.

If the nature of the offered product changes during the offering period (e.g., changes in strategy, risks, costs, and expected return), the light manager must adapt the EID accordingly and make it available again to (potential) investors.

In the Investigation, the AFM observed that not all light managers comply with their obligation to prepare and provide the EID to potential investors and, if necessary, update the information in the EID. For example, light managers do not make the EID available via their own website, do not have a website to make the EID available, have never prepared the EID, or are not aware of the EID and the obligation to do so. Failure to comply with this obligation constitutes a violation of the PRIIPS Regulation, resulting in retail investors being unable to properly ascertain the nature and associated risks of the offered products.

Use of the <150 Persons Retail Condition

When a light manager offers a fund to retail investors and uses the condition to offer participation rights to fewer than 150 persons, the offering must be directed at a clearly defined and delimited group of persons. This explicitly refers to the number of persons to whom the offering is made, not the number of actual participants. If a light manager uses this condition, the light manager must ensure that the offer is made to fewer than 150 persons. The light manager must also be able to demonstrate how they meet this condition.

In the Investigation, the AFM observed that light managers who use the condition to offer a fund to fewer than 150 persons do not always demonstrate how they have met this condition. This is particularly important when concrete and detailed information about the fund is included on a website, which website visitors can access. In such cases, there is often an offering to more than 150 persons.

Furthermore, the Investigation revealed that funds are sometimes offered to more than 150 persons indirectly. For example, the AFM's Investigation showed that in some cases, a light manager had two similar funds, both of which were offered to retail investors under different conditions. For one fund (Fund A), the public was offered investment via a website with a minimum investment of €100,000. For the other fund (Fund B), it was stated that it would be offered to fewer than 150 persons. The AFM's Investigation revealed that more than 150 persons, who were not able or willing to invest a minimum of €100,000, received sufficient information about Fund B through other channels, meaning Fund B was indirectly offered to more than 150 persons.

Wwft and Sw Obligations

Just like licensed managers, light managers are legally obligated to continuously give a careful interpretation to their role as gatekeepers. This means they must comply with all relevant obligations under the Act on the Prevention of Money Laundering and Financing of Terrorism (Wwft)8 and the Sanctions Act 1977 (Sw)9.

Light managers must ensure that the investment vehicles they manage have appropriate and current Wwft policies aimed at limiting and effectively controlling the risks of money laundering and terrorism financing.10 This policy must be proportionate to the nature and size of the investment vehicle. The risk assessment, which makes the specific money laundering risks of the organization visible, underlies the development of policies to limit and effectively control the identified risks. In addition to their own risk assessment, supranational and national risk assessments (SNRA and NRA) must also be included in the policy. The AFM emphasizes that merely developing a policy is not sufficient: compliance in practice is essential for an effective fulfillment of the gatekeeper role.

The Investigation shows that a portion of light managers do not meet all obligations. For example, an (up-to-date and well-founded) risk assessment prepared by the light manager is often missing.11 Additionally, the AFM has observed shortcomings, inter alia, in the execution of risk-based client research regarding investors and other business relationships and the origin of funds,12 and in the complete and correct completion of the AFM's periodic Wwft questionnaires.

Own Responsibility (Also in Case of Outsourcing)

The AFM expects managers to play an active and critical role in controlling their legal obligations, even when tasks are outsourced. It is the responsibility of the light manager to continuously assess whether the conditions for falling under the AIFM-light regime are met.13 If this is no longer the case, the manager must inform the AFM without delay and apply for an AIFMD license under Article 2:65 Wft at the AFM within thirty days.14

Light managers are also responsible for the completeness and accuracy of their registration and compliance with relevant laws and regulations. The AFM expects light managers to inform investors if essential information changes that applies to the light manager and/or its funds, such as changes regarding the investment strategy.15 Furthermore, light managers must ensure correct and up-to-date information provision to the AFM. For example, light managers are obligated to register new funds with the AFM before they are offered. It is also important that light managers keep the contact and address details of involved directors and/or contact persons known to the AFM up to date. The AFM has observed in the Investigation that this is regularly not done or insufficiently done in practice.

Additionally, the AFM has noticed that many light managers use service providers, particularly for Wwft compliance. Although outsourcing can provide support, the light manager remains ultimately responsible at all times.16 This responsibility cannot be transferred. For this reason, the light manager must itself possess sufficient knowledge and skills to critically assess the actions of the service provider.

Deregistration

If you, as a light manager, or one of your fund(s) are (in the future) no longer active, it is important that you deregister with the AFM as soon as possible via the AFM Portal. If you do not have access to the AFM Portal, you can send an email to Meldingenaifmd@afm.nl. In the context of deregistration, you must submit the following information signed:17

• A written explanation, optionally including supporting documentation, stating the reason for the winding up of the investment vehicle and/or the manager;
• A confirmation that the liquidation and dissolution have been carried out in accordance with the fund conditions and applicable laws and regulations;
• A declaration from the manager that the investment vehicle has been fully wound up and that there are no longer any rights and obligations between the manager, the investment vehicle, and the investors;
• And
• A declaration from the manager regarding whether there is a dispute and/or an outstanding claim from an investor or creditor.

14 Under Article 2:66a, fourth paragraph, Wft.
15 For more information on essential information provision, see the 'Policy Rule on Information Provision'. You can find this on the AFM website: Publication of revised Policy Rule on Information Provision.
16 Article 10 Wwft.
17 For this, you can use the 'Notification Form for Deregistration of Excluded Alternative Investment Fund Manager(s) and/or Funds under Management'.

The Investigation shows that a portion of registered light managers are in fact not active. Failure to deregister when inactive has negative consequences for the quality of the register and the effectiveness of supervision. The AFM therefore expects light managers who are no longer active to deregister themselves (and/or the fund) immediately in the manner described above. This also prevents the AFM from involving you in investigations into light managers or incorrectly establishing violations regarding Article 2:66a Wft (such as the AIFMD reporting obligation). As long as the fund is not deregistered, all obligations (including reporting obligations) apply to you as a light manager.

Conclusion

The AFM requests you to carefully study the findings in this letter and determine to what extent you comply with the standards applicable to light managers. Where necessary, we request that you align your business operations with the expectations outlined by the AFM.

Sincerely,

Authority for the Financial Markets

drs. J.P.J. Wensveen
Manager
Market Integrity and Enforcement

mr. N. van der Veen
Manager
Asset Management

Date 30 June 2025
Our reference FeJg-25067898

Attachment: Practical tips and sources for consultation

• More information about the AIFMD reporting obligation can be found on the AFM website.18 For questions, you can contact Meldingenaifmd@afm.nl.
• AIFMD reports can be submitted via 'Reporting Obligations' in the AFM Portal: https://portaal.afm.nl.19 If you do not yet have an AFM Portal, you can register at the bottom of the login page. There you will find a manual: https://www.afm.nl/~/profmedia/files/handleiding/invulinstructie-afm-portaal.pdf.
• For more information about the EID and the PRIIPS Regulation, see: PRIIPs.
• For more information about the scope of both the license and registration obligation for AIFMs, see here: Scope: License or Registration Obligation AIFM.
• For more information about Wwft and Sw obligations: the AFM's Wwft/Sw Guideline20, the Act on the Prevention of Money Laundering and Financing of Terrorism (Wwft), and the Sanctions Act 1977.

18 See: https://www.afm.nl/nl-nl/sector/beleggingsinstellingen/aifm/rapportageverplichtingen/aifmd-rapportage.
19 See also: https://www.afm.nl/nl-nl/sector/actueel/2021/november/aifmd-rapportages-vanaf-2022-naar-afm.
20 AFM update Wwft/Sw Guideline.