In the eyes of the European Securities and Markets Authority, the Channel Islands ought to receive marketing passports under the Alternative Investment Fund Managers Directive, while Switzerland ought to enjoy the same privilege after enacting some legislation.

The European Securities and Markets Authority says that it wants the EU to extend the AIFMD passport to non-EU fund managers. Jersey and Guernsey have been "recommended for inclusion in the regime" by the supranational regulator, while Switzerland has received a conditional recommendation. ESMA has not yet formed an opinion about the US, Singapore, Hong Kong and elsewhere. The final decisions about all states rest not with ESMA but with the various organs of the EU as a whole.

The Swiss federal government is expected to make the necessary changes (including a new article to deal with international co-operation) to the Stock Exchange and Securities Trading Act soon. The process is at a relatively advanced stage and the new version of SESTA passed by the Swiss Parliament in June is due to enter into force on 1 January 2016. One sticking-point in the previous version of that Act related to the possibility that any client might have ten days in which to challenge a decision by FINMA, the Swiss regulator, to transmit information to a foreign financial market supervisory in the Federal Administrative Court. This, at any rate, is what ESMA's wonky English suggests in a recent report.

The new version of the Act that the Swiss Parliament has passed proposes to allow FINMA to choose not to inform the client in advance of information being shared with a foreign regulator in cases where such prior information would undermine the purpose of the request and adversely affect the objectives of the requesting authority.

Inventing new phrases such as "selected based on factors" and new words such as "unlevel," ESMA's report goes into detail about why the regulator has not made its mind up about other jurisdictions. It believes that the United States is too protectionist in the fund arena, it is worried (but does not yet know from research) that the Monetary Authority of Singapore is not monitoring systemic risk well enough and it has a problem with the Hong Kong Securities and Futures Commission's refusal to classify the inspection regimes of all EU member-states as “acceptable,” suspecting in its notes that this could be a sign of protectionist skulduggery.

Ed O’Bree of Bovill, the compliance consultancy, told Compliance Matters: “ESMA has placed great emphasis on ensuring fair market access for European fund managers. The next recommendation in relation to the US, Singapore and Hong Kong is unlikely to take place until 2016 - so managers from those countries seeking European capital will have no choice but to engage with the national private placement regimes until then. Continued uncertainty surrounding the future of the passport system may be deterring some fund managers from Asia and elsewhere from targeting European investors, but the national private placement regime registration processes in most western European countries are quite straightforward and well worth the effort for competent fund managers.”