Explanation on geographical breakdown by the ESMA AIFMD Q&A

Question 73 [last update 02 December 2015]

How should AIFMs determine the geographical focus of assets in which they invest such as stocks, bonds or financial derivatives (questions 78 to 85 of the consolidated template for AIF-specific information)?

Answer 73:

AIFMs should take into account the domicile of the company/entity to which the AIFs have an exposure. For example, if an AIF invests in a stock of a company domiciled in Europe but traded in the US, the corresponding geographical area would be Europe and not North-America. Similarly, an AIF that invest in a bond issued in the US market by a company domiciled in the Europe should select Europe. For financial derivative instruments such as options, AIFMs should look at the financial instrument underlying the financial derivative instruments and apply the same approach as for stocks and bonds.