Apply to be an authorised AIFM

Please refer to PERG 13 Annex 2 Annex 2[9] in our Handbook. This maps the UK MiFID Investment Services and activities to the Part 4A permission regime.

Please note that in order to carry on the activities in FUND 1.4.3R[10] (4), (5), or (6) in respect of investments which are financial instruments, you must also be authorised to carry on the activity in FUND 1.4.3R(3) (discretionary portfolio management).

See PERG 16.5 Q5.5[11] for examples of how the regulated activities specific to AIFs interact with other regulated activities.

CPM firms are full-scope AIFMs who only have the permission of managing an AIF.

If you're a CPM firm, you'll be subject to Chapter 11 of IPRU-INV[13] for your prudential capital requirements.

This means you'll need to maintain ‘own funds’ of:

The greater of:

• €125,000 plus 0.02 per cent of the portfolio of relevant AIFs under management over €250m; or
• one quarter of the firm’s relevant annual expenditure (FOR as defined in MIFIDPRU 4.5)

Plus whichever is applicable of:

• an additional amount equal to 0.01 per cent of the value of assets under management also called the professional negligence capital requirement[14] (in line with IPRU-INV 11.3.11G(1)(a)); or
• the PII capital requirement[15] (in line with IPRU-INV 11.3.11G(1)(b)) – an additional amount of own funds to cover any defined excess on PI insurance

Liquid asset requirements 

Your firm must also, at all times, hold liquid assets (IPRU-INV 11.3.17R) which equal or exceed:

The higher of:

• the funds under management requirement[16] (in line with IPRU-INV 11.3.2R[17]) less the base own funds requirement[18] (in line with IPRU-INV 11.3.1R[19]); or
• the amount specified in IPRU-INV 11.3.3AR[20]

Plus whichever is applicable of:

• 0.01% of AUM (the professional negligence capital requirement)
• PI insurance excess (the PII capital requirement)

CPMI firms are full-scope AIFMs who undertake additional regulated activities outside of the managing AIF(s) they are applying to manage.

If you're a CPMI firm, you'll be subject to both Chapter 11 of IPRU-INV[16] and MIFIDPRU[21] and therefore subject to:

• the same calculation as for CPM firms above, but also
• the applicable requirements under MIFIDPRU detailed in IPRU-INV 11.6

Please note: your Funds under Management calculation should only include the AUM of the AIFs under management (including any delegated). It should not include any AUM from segregated mandates.

Similarly, the AIF AUM should not be included in any K-factor calculations under MIFIDPRU calculations.

You'll be subject to Chapter 5 of IPRU-INV[22] for your prudential capital requirements.

Your financial resources requirement will be a liquid capital requirement, which will be the higher of:

• £5,000, or
• your total capital requirement

Your total capital requirement is the sum of your:

1. expenditure-based requirement – this is normally 6/52nds of annual expenditure but can be 25 per cent if the firm itself holds customers’ monies or assets or appoints a related group entity as custodian
2. position risk requirement – this relates to the positions held by the firm, not the fund
3. counterparty risk – this relates to items directly related to the firm’s trading book, not the fund
4. FX Risk
5. other Risk

However, if you meet one of the exemptions below you'll have an Own Funds Requirement of £5,000.

If your firm's[23] permitted business:

• does not include the holding of customers' monies or assets and it neither executes transactions (or otherwise arranges deals) in investments nor has such transactions executed for itself or its customers
• includes the activities as in (a) above, but only in respect of venture capital investments[24] for non-retail clients
• limits it to acting a residual CIS operator or a small authorised UK AIFM where the main purpose of the CIS or AIF[25] (as applicable) is to invest in permitted immovables[26] whether in the UK or abroad

You'll be subject to the MIFIDPRU[25] requirements and probably be a small non-interconnected firm.

This means your Own Funds Requirement will be the higher of:

• a Permanent Minimum Requirement (PMR) of £75,000, or
• a Fixed Overhead Requirement

Please complete all the forms below, which you can access on Connect:

• Full Scope AIFM Variation of Permission form
• Supplement for Investment Managers
• AIF Schedule
• Core Details form
• IT self-assessment questionnaire
• Long Form As
• Controller forms
• Owners and influencers appendix
• Disclosure of significant events appendix
• Fees and levies supplement
• Organisation structure chart
• Controller structure chart
• Fund 3.3 2R checklist (where relevant)
• UK CRR /CET1 forms
• MIFIDPRU supplement (CPMI only)

Please complete all the forms below, which you can access on Connect:

• Small Authorised UK AIFM Variation of Permission form
• Schedule of AIFs for Small Authorised UK AIFMs
• Supplement for Investment Managers
• Form A
• Controller form
• Core details form
• Disclosure of significant events appendix
• IT Self-Assessment form
• Checklist and Declaration Wholesale
• Owners and influencers appendix
• Wholesale Fees and Levies Supplement
• Structure chart – organisation
• Controller structure chart
• MiFID Annex (if applying for MiFID permissions) 

Please complete the forms below, which you can access on Connect:

• AIF Schedule (full-scope AIFMs and small authorised AIFMs)
• Full Scope AIFM Variation of Permission form (full-scope AIFMs and small authorised AIFMs)
• Supplement for Investment Managers (CPMI)
• Fund 3.3 2R checklist (where applicable)
• Fund marketing document (where applicable)
• Incorporation document (where applicable)
• UK CRR /CET1 forms (where applicable)
• MIFIDPRU Supplement (where applicable)

Your application must include the following:

• Investment Management Agreement (IMA)
• compliance monitoring programme
• details of any unregulated business
• details about the funds your firm will manage:
  • funds structuring options[29]
  • AIF schedule
  • incorporation documents
  • offering document
• if you intend to control client money, the name of a person who will hold the PR-z function
• whether you firm is subject to our Consumer Duty[30], and if so a summary of your implementation plan

You'll also need to explain how you've mitigate all harms to consumers or markets that we think are most likely to arise from asset managers’ business models. We cover this in detail in our Dear CEO letter[31].

If you're applying to be a full-scope AIFM, please also include:

• written confirmation that arrangements with depositaries are in materially final form
• delegation and sub-delegation agreements, where applicable

Your application should include information on the areas below. This needs to be detailed enough for us to assess the potential impact on your proposed business model.

Liquidity management
Explain how your portfolio/fund liquidity management policy ensures portfolio/fund liquidity is managed in line with our requirements and the expectations of your clients.

Consumer Duty
Explain your plans for ensuring your business can provide good outcomes for retail customers and will meet our cross-cutting and outcome rules[32]. Find out more about the Consumer Duty[35].

Environmental, Social and Governance (ESG)
If ESG-related advice, products or services are expected to be a material part of your business model, we expect you to include information on your specific ESG competencies, any data products and your marketing strategy.