Reed Smith Client Alerts

The FCA has updated guidance on extending deadlines for AIFMs to publish fund reports and accounts during the COVID-19 crisis.

Authors: Tim Dolan Winston Penhall Emily E. Cartwright Matthew Evans

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At the beginning of April, the FCA acknowledged that fund managers faced significant challenges in producing financial information in the current environment and introduced temporary extensions for UK authorised fund managers of UK UCITS schemes and NURS. On Wednesday, 22 April, some of the deadline extensions were amended to apply to (a) full-scope UK AIFMs of EEA AIFs and non-EEA AIFs marketed in the UK; and (b) AIFMs of EuSEFs or EuVECAs established in the UK.

Full-scope UK AIFMs are ordinarily required to publish AIF annual reports within six months of the accounting or financial year end of each AIF. Market volatility resulting from the COVID-19 crisis poses significant obstacles, particularly in terms of valuations with auditors being constrained in terms of access to the data required to produce an audit opinion and challenges with staffing in the current environment. A volatile and unpredictable market hampers the ability to produce forecasts and projections, cost of capital estimates and valuations of portfolio investments.

The FCA expects UK AIFMs, AIFMs of UK EuSEFs or EuVECAs and UK authorised fund managers of UK UCITS and NURS to publish annual reports on time, where possible, without compromising the quality of the report. However, recognising operational challenges faced by these fund managers, the FCA’s temporary relief allows managers to publish annual reports within eight months (for AIFs, EuSEFs, EuVECAs or QIS funds) and six months (for UCITS and NURS) of the end of the relevant fund’s accounting or financial year. This is a two month extension to the deadline for the publication of annual reports.