What is the intent behind AIFMD regulations regarding hedge funds?

The intent behind the Alternative Investment Fund Managers Directive (AIFMD) regulations is primarily to provide a regulatory framework for alternative investment fund managers. AIFMD aims to enhance investor protection and improve the transparency of the alternative investment sector, which includes hedge funds. By establishing a standardized set of rules and guidelines, the regulations ensure that fund managers operate with a degree of accountability, transparency, and risk management practices that align with broader financial stability goals.

The directive also seeks to monitor the activities of fund managers more effectively, ensuring they meet specific requirements before they can market their funds across EU member states. This creates a harmonized environment that fosters investor confidence while also addressing issues related to systemic risk, as hedge funds can significantly impact financial markets.

The other options suggest a more restrictive or eliminating approach towards hedge funds, which is not the goal of AIFMD. Instead, the directive aims to regulate and oversee the industry, allowing hedge funds to continue operating under supervised frameworks that protect investors and uphold market integrity.