Mr Maijoor recalled that ESMA decided to assess non-EU countries individually rather than as a single block. Mr Maijoor said: ‘We did so because we felt that was the only way in which to carry out a proper assessment of the various criteria set out in the AIFMD. In particular, we considered it important to make a distinction between the very different situations of non-EU countries in terms of such factors as the demand for the passport, the access to the market of these non-EU countries for EU funds and managers, and their regulatory framework as compared to the AIFMD’.
ESMA developed and subsequently applied a comprehensive assessment methodology to six non-EU countries: Guernsey, Hong Kong, Jersey, Switzerland, Singapore and the United States. The selection of these jurisdictions was made taking into account a number of factors including the amount of activity already being carried out by entities from these countries under the NPPRs and further efforts made by stakeholders in these countries to engage with the process. The advice issued by ESMA at the end of July was positive in respect of the extension of the passport to Guernsey and Jersey as well as Switzerland after the enactment of pending legislation.
Looking ahead to the next steps, ESMA will carry out further work on three key areas:
Firstly, ESMA will continue with the assessment of Hong Kong, Singapore and the United States with a view to reaching a definitive conclusion on whether to potentially extend the passport to those countries.
Secondly, ESMA will start the assessment of a second group of non-EU countries, namely Australia, Canada, Japan, the Cayman Islands, the Isle of Man and Bermuda. These countries were selected using the same criteria as for the first set of non-EU countries assessed.
Thirdly, ESMA will focus on putting in place the extensive framework required if the passport is indeed extended to non-EU countries including making preparations for the significant role of ESMA in the functioning of the passporting system and the strengthened supervisory cooperation that will be required.