AIFMD II in practice: the operating model questions firms are still answering

AIFMD II has applied since 16 April 2026, and the enhanced reporting requirements follow in April 2027. For most managers, the policy work is done. What remains is operational: showing how delegation is overseen, how liquidity tools would really be used, and whether the data is ready for the new reporting.

From policy to practice

The revised Directive amends both AIFMD and the UCITS Directive, and most of its provisions have applied since 16 April 2026. Policies have been updated, prospectuses revised and boards briefed. Typically, the questions that remain sit inside the operating model, where the rules meet day-to-day work.

This article sets out the questions we see firms still working through. It is a practical view, and it is no substitute for legal advice on your own structure.

Delegation: can you evidence the oversight?

AIFMD II expects managers to document why they delegate and to monitor delegates robustly, and it strengthens expectations on substance, including at least two individuals conducting the business on a full-time basis and resident in the EU. Most firms have the policy. Fewer can show, quickly, the evidenced record behind it: which reviews took place, what they found and what was done about it.

A useful test is to ask how long it would take to assemble the oversight evidence for one delegate if a regulator asked tomorrow. If the answer involves searching inboxes, the process deserves attention.

Liquidity management tools: who decides, and how?

Managers of open-ended AIFs must select at least two liquidity management tools from the harmonised list and disclose them to investors, with a transition period for existing funds. Selecting the tools is the easy part. The operating questions are about activation:

• What triggers a decision to use a tool, and who makes it?
• How do dealing, transfer agency and investor communications respond on the day?
• Has the process been rehearsed, and is there a record of the rehearsal?

A walkthrough of the activation path, step by step, often surfaces hand-offs that nobody owns.

Loan origination: are the controls built in?

For loan-originating funds, the new rules on leverage limits, risk retention and concentration need to show up in pre-trade checks, monitoring and reporting. Where these limits are tracked in spreadsheets, firms are weighing whether the control environment will hold as volumes grow.

Reporting: is the data ready for April 2027?

The enhanced Annex IV and UCITS supervisory reporting applies from 16 April 2027, and some of the supporting detail is still being finalised. That uncertainty makes it tempting to wait. Firms that are mapping their data sources, ownership and quality checks now will have far more room to adapt when the final templates land.

A practical way forward

Each of these areas responds well to the same approach we used on large regulatory programmes in global banks: read the rule against how the firm really operates, agree one interpretation, set owners and controls in a single plan, and close with an evidenced record. Our regulatory change service can help with one area or the whole programme.