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On April 3, 2025, the European Securities and Markets Authority (ESMA) released the MiFIR Review Consultation Package 4, which focuses on transparency regarding derivatives, package orders, and the input/output data for the derivatives consolidated tape. Overview This review, outlined in Regulation (EU) 2024/7913, introduces two new articles: Article 8a for pre-trade transparency and Article 11a for post-trade deferrals. This effectively separates the non-equity regime into two segments: one for bonds, structured finance products (SFPs), and emission allowances (EUAs) under revised Articles 8 and 11, and another for derivatives governed by the new Articles 8a and 11a. To ensure consistency across asset classes and in response to political guidance prioritizing bond transparency, ESMA has opted to address these issues separately. A final report regarding the transparency mandate for bonds, SFPs, and EUAs was published on December 16, 2024. The current consultation addresses the transparency requirements for derivatives as specified in Articles 8a and 11a. Key Proposals The consultation presents several significant proposals from ESMA: Transparency Regime for Derivatives : A new framework for exchange-traded derivatives (ETD) and over-the-counter (OTC) derivatives. This includes outlining the scope of derivatives subject to transparency, proposing new liquidity determinations for pre-trade waivers, and modifying fields and flags related to post-trade transparency. The table below provides an overview of the derivatives in scope of transparency. Deferral Regime : Establishing a new deferral regime for ETD and OTC derivatives, detailing various size thresholds and deferral durations for post-trade transparency. Amendments to Transparency Conditions : Proposing changes to the conditions under which MiFIR trade transparency requirements may not apply to transactions by members of the European System of Central Banks. Review of Package Order RTS : A reassessment of Commission Delegated Regulation (EU) 2017/2194 (‘Package order RTS’), particularly in light of new scope and liquidity determinations. Data Quality Standards : Developing draft regulatory technical standards that specify data quality requirements for prospective consolidated tape providers and data contributors for the OTC derivatives tape, as mandated by ESMA. Next Steps The consultation will remain open for comments until July 3, 2025. ESMA plans to publish a final report and submit draft technical standards to the European Commission in the fourth quarter of 2025.

On March 13, 2025, the European Commission Commission announced that will undergo a simplification process of GDPR.  In particular, the European Commission has adopted new proposals that will cut red tape and simplify EU rules for citizens and business , in line with its vision to make the EU’s economy more prosperous and competitive, as well as to foster a favourable business environment and ensure that companies can thrive.  It is anticipated that, the proposed changes will focus on easing record-keeping obligations for organizations with fewer than 500 employees while preserving the core principles of data protection. The suggested simplification strategies could involve: Streamlined Documentation Standards  that cut down the detail required for processing activities considered lower risk. Simplified Risk Assessment Frameworks  that deliver more straightforward guidance and less complicated approaches for SMEs to assess their data processing practices. Standardized Tools and Templates  that enhance compliance accessibility without necessitating specialized legal or technical skills. Overall, in its work programme for 2025, the European Commission announced a series of measures to address overlapping, unnecessary or disproportionate rules that create barriers for EU companies. Collectively, with these measures, the Commission wishes to reduce administrative burdens by 25%, and by 35% for small and medium-sized businesses, by 2029.

🔔 Legal / Regulatory Alert Cyprus! 🔊 Important Update for Employers and HR Professionals! The Transparent and Predictable Working Conditions Law of 2023 (L. 25(I)/2023) introduces significant changes to employment practices in Cyprus, in the context of a recent amendment of the said Law (L.126(I)/2024). According to the new Decree published on 20.12.2024 (Κ.Δ.Π. 455/2024), all employers must register essential employment terms in the ERGANI system by February 28.02.2025 the latest. Key terms to be registered include employer - employee details, working location - job description, employment start date, salary and payment frequency, working hours per day/week, annual leave duration and allocation method, probation period terms and other. Employers must ensure that these terms, along with other required details, are clearly defined and registered within the stipulated deadlines. Non-compliance could result in administrative fines and legal implications. Stay proactive to ensure alignment with these new transparency and predictability obligations. Let’s foster a fair and compliant employment culture! https://www.gov.cy/ergasia-kai-koinonikes-asfaliseis/ilektroniki-katagrafi-oron-ergasias/

Introduction The European Securities and Markets Authority (ESMA) recently published a Statement to guide investment firms in navigating these complexities within the framework of the Markets in Financial Instruments Directive II (MiFID II). The landscape of retail investment services is undergoing a transformative shift, largely driven by advancements in Artificial Intelligence (AI). This technology holds the potential to enhance efficiency, foster innovation, and improve decision-making processes. However, alongside these opportunities come inherent risks, including algorithmic biases, data quality challenges, and a potential lack of transparency. Potential Benefits of AI in Investment Services The adoption of AI in financial services is varied across firms and jurisdictions, yet several promising applications have emerged: Customer Service and Support : AI-driven chatbots and virtual assistants can enhance client interactions by providing immediate responses to inquiries and account-related queries. Investment Advice and Portfolio Management : AI tools can analyze client data—including financial situations and risk tolerances—to deliver personalized investment recommendations. By processing vast amounts of market data, AI can identify potential investment opportunities and assist in managing client portfolios. Compliance : Investment firms can utilize AI to streamline the analysis of financial regulations, detect non-compliance with MiFID II rules, and prepare compliance reports. Risk Management : AI can evaluate risks associated with various investment options, helping firms and clients manage their overall portfolio risks effectively. Fraud Detection : AI systems can monitor transactions and communications for unusual patterns that may indicate fraudulent activities, enhancing security measures. Operational Efficiency : By automating routine tasks such as data entry and report generation, AI allows employees to focus on more complex responsibilities. It is essential to note that these applications extend beyond tools developed by firms; they also encompass third-party AI technologies utilized by employees, which may or may not have senior management's direct approval. Risks for Firms and Clients Despite the benefits, the integration of AI into investment services is not without challenges: Over-reliance on AI : There is a risk that both firms and clients may depend too heavily on AI for decision-making, potentially neglecting the importance of human judgment, especially in volatile markets. Lack of Transparency : Many AI systems operate as "black boxes," making their decision-making processes opaque. This lack of explainability can hinder the adjustment of underperforming strategies. Data Privacy and Security : The extensive data collection required by AI tools raises significant privacy and security concerns, particularly regarding personal data. Algorithmic Bias : AI tools can produce biased outcomes due to training data that reflects historical inequalities or societal stereotypes. This can lead to misleading investment advice and unexpected risks. Conclusion As AI continues to evolve and integrate into retail investment services, it is imperative for firms to remain vigilant in addressing the associated risks while leveraging its potential benefits. The guidance provided by ESMA aims to ensure that investment firms prioritize their clients' best interests amidst this technological revolution. By maintaining a balance between innovation and accountability, the financial sector can navigate the complexities of AI and enhance investor protection in a rapidly changing landscape.

In recent years, the importance of Environmental, Social, and Governance (ESG) risks has surged, compelling financial institutions to re-evaluate their risk management frameworks. On 8 January 2025 , the European Banking Authority (EBA) released guidelines aimed at helping these institutions effectively manage ESG risks, ensuring not only compliance but also long-term sustainability and resilience. Understanding ESG Risks ESG risks encompass a broad range of issues that can significantly impact financial performance and institutional integrity. Environmental risks include climate change and resource depletion, social risks relate to human rights and labor practices, and governance risks involve corporate governance and ethical conduct. The interplay of these risks can lead to profound economic transformations, affecting the financial sector and requiring institutions to adapt proactively. Key Provisions of the EBA Guidelines Risk Integration : Financial institutions are required to incorporate ESG risks into their credit, market, operational, and liquidity risk frameworks. This comprehensive approach ensures that ESG factors are considered across all areas of risk management. Materiality Assessments : Institutions must conduct annual reviews for large entities and biannual assessments for smaller organizations to gauge the impacts of ESG risks on their operations. This regular evaluation is critical for identifying potential threats. Transition Planning : Institutions are mandated to align their strategies with EU climate targets, including achieving net-zero emissions by 2050. This alignment is essential for supporting a sustainable economy. Data and Reporting : Robust data collection processes are necessary for monitoring ESG-related performance indicators. Institutions must implement effective reporting frameworks to track their progress. Governance : ESG risks must be embedded within internal governance structures, risk appetites, and overall risk management frameworks. This ensures that ESG considerations are a fundamental part of decision-making processes. Impact on Financial Institutions The guidelines emphasize a forward-looking approach, requiring institutions to: Conduct scenario-based analyses for climate and environmental stress testing, enabling them to prepare for potential future risks. Develop sector-specific policies for high-risk industries, ensuring tailored strategies that address unique challenges. Enhance ESG capabilities within risk management teams, equipping them with the skills necessary to navigate complex ESG landscapes. Assess ESG risks as part of their capital and liquidity adequacy processes, integrating these considerations into their overall financial health assessments. Implementation Timelines The EBA guidelines will take effect on 11 January 2026 , for most institutions. However, smaller and non-complex institutions will have an extended deadline until 11 January 2027 , to comply with these requirements. This timeline provides financial institutions with a clear pathway to enhance their ESG risk management frameworks. Conclusion As the financial landscape evolves, the integration of ESG risks into institutional frameworks is no longer optional; it is a necessity for long-term sustainability and compliance. The EBA's guidelines provide a comprehensive roadmap for institutions to navigate this complex terrain, ensuring they are not only prepared for regulatory requirements but also positioned to thrive in a rapidly changing world. By embracing these guidelines, financial institutions can contribute to a more sustainable economy while safeguarding their own financial health.

🔔  Legal / Regulatory Alert – Cyprus! CySEC issued today the Circular 689, which adopts the EBA Guidelines on benchmarking of diversity practices, including diversity policies and gender pay gap  (the “Guidelines on benchmarking of diversity practices”). 🔊  Important Update for Class 2 Firms! The Guidelines on benchmarking of diversity practices apply to Class 2 firms. 📢  Latest Updates in brief CySEC has issued the Circular C689 on 19/03/2025 to bring to the attention of the Cyprus Investment Firms (the “CIFs”) that it adopted the EBA Guidelines on benchmarking of diversity practices, including diversity policies and gender pay gap (the “Guidelines on benchmarking of diversity practices”). The Guidelines outline the following: Investment firms, except for those categorized as small and non-interconnected, are required to provide specific information to competent authorities. This information will also be shared with the European Banking Authority (EBA) for the purpose of benchmarking diversity practices. Competent authorities must gather data from investment firms on an individual basis regarding diversity practices within their management bodies. This includes details about the composition of the management body, diversity policies, and the gender pay gap among its members. In view of the above, CySEC will notify the selected CIFs about their inclusion in the sample by January 31st of the relevant year. CIFs chosen for the 2025 sample have already been informed. ❓ What CIFs Must Do : CIFs included in the sample, should submit the required information via the Remuneration Diversity Form to CySEC, by   30 April , every three years starting in 2025   with a reference date of 31 December 2024, via CySEC’s XBRL Portal. ⛔ Why it Matters: CIFs needs to comply and are urged to consider the abovementioned EBA Guidelines and where necessary, take actions to ensure compliance with their provisions.

🔔  Legal / Regulatory Alert! ESMA has issued a warning letter in connection to the use of Artificial Intelligence for Investing, aiming to inform investments on what should know / what should be aware of. 🔊  Important Update for ALL investors! 📢  In brief Use AI as a Tool, Not a Sole Resource : AI tools can provide investment suggestions, but they should not be the only resource for financial decisions. It’s vital to consider multiple perspectives and consult authorized professionals. Be Wary of Promises : Avoid get-rich-quick schemes and be skeptical of AI tools promising high returns, as these claims are often unrealistic and misleading. Regulatory Awareness : Publicly available AI tools are not regulated and do not have an obligation to act in your best interest, which increases the risk of poor investment decisions. Understand Limitations and Risks : AI-generated advice can be based on outdated or inaccurate information. Predicting market movements is inherently risky, and human judgment remains crucial. Protect Your Privacy : Do not share personal information with AI tools, as they may lack adequate security measures, putting your data at risk. Always prioritize your privacy when using these services. ❓ What should be aware of : ⛔ Why it Matters: Client protection shall remain on top of the agenda of regulated entities as well as investors.

🔔 Legal / Regulatory Alert – Cyprus! CySEC has issued today Circular C691, which outlines the requirements for Cyprus Investment Firms (CIFs) regarding the submission of quarterly statistics. 📊 Important Update for CIFs! Circular C691 mandates that all CIFs authorized by March 31, 2025, must complete and submit the latest version of the Form QST-CIF to CySEC. 📢 Key Updates in Brief CySEC has released Circular C691 on March 26, 2025, informing CIFs about the submission process for the Form QST-CIF. This submission is crucial for compliance with section 25(1)(c)(ii) & (iii) of the CySEC Law. 1. Submission Requirements: All authorized CIFs must submit the completed Form QST-CIF, Version 16, by May 5, 2025. CIFs that have not utilized their authorization must also submit the Form. Upon submission, firms must receive a feedback file confirming receipt, which indicates whether the submission was error-free. 2. Importance of Deadline: The deadline for submission is set for May 5, 2025. CIFs are reminded that this deadline is crucial to avoid administrative penalties as outlined in section 37(5) of the CySEC Law. No reminders will be sent to firms that fail to comply. 3. General Instructions: The Form is to be completed in English and all monetary values reported in Euros. CIFs must ensure they are using the latest version of the Form and follow the provided instructions closely. 4. Naming Convention for Submission: CIFs are required to name their Excel file following this format: Username_yyyymmdd_QST-CIF This ensures proper identification and processing of submissions. 5. Support for CIFs: CIFs with questions regarding the Form completion should submit inquiries in writing before April 28, 2025, to the designated email. For technical issues related to submission, they can visit the CySEC website or reach out to the technical support email. ⛔ Why It Matters: CIFs are urged to comply with these requirements to avoid penalties and ensure proper reporting. Adhering to the submission guidelines is essential for maintaining regulatory standards and operational integrity.

🔔  Regulatory Alert! 📢 2025 is going to bring a wave of new compliance regulations and financial industry regulations that are likely to deeply influence the landscape. For finance professionals in Europe, this means a period of preparation and deeper understanding of the changes.   Key regulatory changes affecting the financial sector in Europe along with regulatory tips on what it means for businesses and how to prepare for it, are provided below. ⛔ Why it Matters: Stay tuned ... Compliance is not about avoiding regulatory fines and penalties. It's about building trust with customers, investors, and regulators, and embracing the upcoming changes can help financial institutions and position themselves as leaders and champions in the ever-evolving financial industry.

Introduction In November 2023, European institutions finalized a political agreement on a new directive aimed at amending the existing AIFMD, known as the Amending Directive. This directive was published in the official Journal in March 2024. A major challenge was establishing a framework for EU AIFMs managing AIFs involved in loan origination activities. This article summarizes the key features of the loan origination regime established in the political agreement. The new regulations will take effect on April 16, 2026, and will be particularly relevant for managers of dedicated credit funds and those managing other funds that provide loans, including shareholder loans in private equity contexts.   What is a ‘Loan-Originating AIF’? A "loan-originating AIF" is defined in Article 4 as an AIF that either: Primarily focuses on originating loans, or Has originated loans that account for at least 50% of its net asset value. Loan origination is described as granting loans directly by an AIF or indirectly through third parties or special purpose vehicles, where the AIFM or AIF is involved in structuring the loan prior to exposure. AIFMD II differentiates between an AIF engaged in loan origination and a “loan originating AIF,” which has implications for the application of various rules. Risk Management Requirements Policies and Procedures AIFMs are required to implement effective policies, procedures, and processes for granting credit related to loan origination activities. If an AIFM oversees an AIF engaged in loan origination or purchasing loans from third parties, it must also manage credit risk and administer the AIF’s credit portfolio. These policies must be regularly updated and reviewed at least annually. These requirements do not apply to shareholder loans, provided their total does not exceed 150% of the AIF's capital. Concentration Limits AIFMs must ensure that the total value of loans to any single borrower does not exceed 20% of the AIF’s capital if the borrower is: A financial undertaking defined by Article 13(25) of Solvency II, Another AIF, or A UCITS. This 20% limit must be adhered to as specified in the AIF’s official documents and can be extended under exceptional circumstances. Leverage Limits For "loan-originating AIFs," leverage must not exceed: 175% for open-ended AIFs, 300% for closed-ended AIFs. Leverage is calculated as the ratio of the AIF’s exposure to its net asset value. Certain borrowing arrangements fully backed by investor commitments can be excluded from this calculation.   Risk Retention Requirements To discourage quick re-sales of loans on secondary markets, AIFMs must retain 5% of the notional value of each loan they originate and subsequently transfer to third parties. Specific retention periods apply based on the nature of the loan. Restrictions on Lending AIFMD II prohibits AIFs from granting loans to: The AIFM or its staff, The depositary or its delegates, Any entity within the AIFM’s group, unless it is a financial undertaking that exclusively finances unrelated borrowers. Member States may also restrict AIFs from lending to consumers, as defined by the Consumer Credit Directive. Prohibition on Originate to Distribute AIFMs are prohibited from managing an AIF that engages in loan origination solely for the purpose of transferring those loans to third parties. Liquidity Management Obligations Under AIFMD II, a loan-originating AIF can only be open-ended if its AIFM demonstrates that the AIF’s liquidity risk management system aligns with its investment strategy and redemption policy. Open-ended AIFs are subject to enhanced liquidity risk management requirements, including selecting additional liquidity management tools from a specified list.   Grandfathering The leverage limits, concentration limits, and liquidity management requirements mentioned above do not apply to preexisting AIFs until April 16, 2029, or at all if those AIFs do not raise further capital after AIFMD II takes effect. However, if an existing AIF is already in breach of the leverage or concentration limits when AIFMD II takes effect, it must not increase its leverage or lending until April 16, 2029. Additionally, some of the requirements relating to loan origination could apply to loans originated from April 15, 2024, if they are still in place by April 16, 2026. Conclusion The introduction of the loan origination regime under AIFMD II represents a significant shift in the regulatory landscape for EU AIFMs. By establishing clear definitions, risk management protocols, and obligations regarding loan origination, the directive aims to enhance transparency and stability within the financial system. As the effective date approaches, AIFMs must ensure compliance with these new requirements to successfully navigate the evolving regulatory environment. This regime not only impacts dedicated credit funds but also influences a broader range of financial entities engaged in loan activities, underscoring the need for adaptation to these regulatory changes.

🔔 Regulatory Alert _Relaxation! 🔊  Applicable to: Investment Firms, Insurance Companies, Financial Institutions 📢  Latest Update – Focus on DORA The European Banking Authority (EBA) repealed its  Guidelines on major incidents reporting under the Payment Services Directive (PSD2)  due to the application of harmonised incident reporting under the Digital Operational Resilience Act (DORA) as from 17 January 2025. Purpose & Goal of Repealing DORA, applies since 17 January 2025 and introduced a set of harmonised incident reporting requirements that apply to financial entities across the banking, securities/markets, insurance and pensions sectors. The repeal of the Guidelines aims at simplifying the reporting of major incidents by payment service providers (PSPs) and providing legal certainty to the market. In that regard, to ensure legal clarity and certainty for the payment service providers covered by DORA, and to simplify the overall reporting of major incidents by PSPs, the EBA has decided to repeal its Guidelines on major incident reporting under PSD2 for entities covered by DORA. Entities Covered by DORA : DORA applies to a wide range of financial entities, including: Credit institutions Payment institutions Electronic money institutions Account information service providers It is important to note that incident reporting requirements under PSD2 still apply for other types of PSPs (e.g. post-office giro institutions and credit unions) that are not covered by DORA. Those PSPs that are still subject to incident reporting requirements under the PSD2 can be subject to national incident reporting requirements, regardless of the existence of the EBA Guidelines. Competent authorities willing to retain the incident reporting approach included in the EBA Guidelines for those PSPs can continue to do so under their national legal framework or supervisory measures.  . ⛔ Why it Matters: Compliance and internal audit functions are designed to ensure that the internal control mechanisms to monitor, identify, measure, and mitigate any possible risks of non-compliance with the applicable rules are in place. Therefore, ensuring that the entities have robust internal controls is crucial to avoid investor detriment and preserve financial stability.

Background of AIFMD II The Alternative Investment Fund Managers Directive (AIFMD) has undergone substantial revisions with the introduction of AIFMD II, aimed at enhancing regulation and investor protection within the European Union's financial landscape. This article delves into the significant changes introduced by AIFMD II, their implications for fund managers, and the expected impact on the investment sector. Key Time milestones On November 25, 2021, the European Commission unveiled proposals to amend the AIFMD, followed by a series of negotiations involving the Council of the EU and the European Parliament. After extensive discussions, a provisional agreement on AIFMD II was reached in July 2023. The final text was published in the Official Journal of the EU on March 26, 2024, with an implementation date of April 15, 2024. Member States have until April 16, 2026, to transpose these provisions into national law. Major Changes in AIFMD II Delegation Framework AIFMD II retains the existing delegation structure but enhances the requirements for oversight and reporting: Supervision Enhancements: AIFMs must notify their national competent authority (NCA) when delegating functions to third parties. This requirement ensures that supervisory bodies maintain updated information on delegation arrangements. Expanded Liability: The liability of AIFMs extends to include not only core delegated functions but also ancillary services, reinforcing the need for careful selection and monitoring of delegates. Clarification on Marketing: The directive clarifies that marketing functions performed by distributors do not constitute delegation, alleviating some industry concerns. Key Requirements for Delegation Qualified Delegates: AIFMs must ensure that delegates are adequately qualified to perform delegated functions and that they are monitored effectively. Data Reporting: AIFMs are required to provide detailed information about the percentage of assets subject to delegation, although this data will not serve as an evidential indicator for assessing the adequacy of risk management. Authorisation Requirements The authorisation process has been modified to demand more detailed disclosures from AIFMs: Granular Information: AIFMs must provide extensive details about the individuals conducting business, delegation arrangements, and resources allocated for portfolio and risk management tasks. Partial or Full Delegation: AIFMs must specify whether their delegation arrangements are partial or full, enhancing transparency for regulatory oversight. Reporting Obligations AIFMD II introduces comprehensive reporting requirements designed to enhance transparency and regulatory oversight: Detailed Risk Profiles: AIFMs are required to report on various risk aspects, including market, liquidity, counterparty, and operational risks, as well as total leverage employed by the AIF. Delegation Specifics: AIFMs must disclose information about the number of resources allocated for portfolio management, a list of delegated activities, and the start and end dates for delegation arrangements. Disclosure to Investors The revised directive places a strong emphasis on investor transparency: Enhanced Disclosure: AIFMs must provide more detailed information regarding risks, fees, and investment nature both prior to and periodically throughout the investment period, ensuring investors are well-informed. New Loan Origination Regime AIFMD II introduces a new framework for loan origination, which is expected to significantly impact investment strategies and operations within AIFs. The updated Loan Origination regime within AIFMD II introduces several significant modifications: Lending Passport: A major feature is the introduction of a lending passport, allowing for greater mobility in loan origination across the EU. Leverage Limits : New leverage restrictions have been established, capping closed-ended funds at 300% and open-ended funds at 175%. These limits may pose challenges for funds engaged in substantial loan origination activities. Applicability : The regime specifically targets EU full-scope AIFMs managing funds involved in loan origination, with additional requirements for those significantly engaged in this activity. Flexibility: Interestingly, the regime allows for both closed-ended and open-ended structures for loan-originating AIFs, providing some operational flexibility. Risk Retention: A new requirement mandates that AIFMs retain 5% of the risk associated with loans, which aligns with existing EU regulations but is a novel application in the context of straightforward lending. National Implementation : As AIFMD II functions as an EU Directive, it must be integrated into national laws, which could lead to variations in implementation. Member States may also enhance their frameworks beyond the EU baseline, a practice known as "gold-plating." Non-EU Managers Exclusion: Notably, the loan origination regime does not extend to non-EU managers operating in the EU, potentially placing them at a regulatory disadvantage compared to their EU counterparts. The above underscores the importance of closely monitoring the implementation of AIFMD II, especially as it pertains to loan origination, as it may significantly influence market practices and regulatory compliance for fund managers. Upcoming Regulatory Guidelines / Technical Standards Implications for Fund Managers The amendments brought forth by AIFMD II will necessitate substantial adjustments in fund management practices: Increased Compliance Requirements : Fund managers will need to invest in compliance and reporting infrastructure to meet the new obligations. Focus on Risk Management: Enhanced risk management protocols will be critical for meeting regulatory standards and maintaining investor trust. Delegation Strategy Reevaluation : Fund managers will need to reevaluate their delegation strategies to ensure compliance with the new requirements and maintain effective oversight. Proactive Approach Scoping:  Identifying which of the new requirements and amendments are relevant to the AIF's regulatory footprint and activities. Gap analysis:  Based on in-scope activities, perform initial analysis to identify gaps, potential actions, accountable owners, and timelines.  Product suite:  Consider how the new requirements could impact on the AIF's commercial strategy, particularly regarding loan origination funds. Reporting capabilities:  Given the new information all AIFs will need to submit, start considering the technology capabilities that will be required and which function of the business will be responsible.  Conclusion AIFMD II marks a pivotal shift in the regulatory framework governing alternative investment funds within the EU. With enhanced transparency, stricter reporting obligations, and refined delegation rules, fund managers must proactively prepare for compliance ahead of the 2026 deadline. Understanding these changes will be essential for navigating the evolving investment landscape and ensuring competitive positioning in the market. As AIFMD II comes into effect, the emphasis on risk management and transparency will likely reshape how investment firms operate, ultimately benefiting investors and the broader financial ecosystem.