By: Tomáš Kreisl
April 21, 2026 5 min read
The new Directive (EU) 2024/927 of the European Parliament and of the Council [1], commonly referred to as AIFMD II, extensively amends and supplements the original 2011 AIFMD. The adoption of the new directive was driven by developments in capital markets, including the surge in illiquid assets, debt funds, and the outsourcing of management functions. It seeks to harmonize rules for alternative and retail funds. AIFMD II does not abolish the existing framework but adds new obligations and clarifications, particularly regarding loan-originating funds, stricter oversight of outsourcing, expanded transparency requirements, and manager reporting. The objective is to ensure investor protection and market stability without hindering the role of alternative funds in financing the economy.
The transposition deadline for the Czech Republic expired on April 16, 2026. By this date, an amendment to the Act on Investment Companies and Investment Funds (the "ZISIF Amendment"), which implements the directive, was expected to take effect.
The government submitted the ZISIF Amendment in early November 2025, with the first reading originally planned for January 2026. In reality, the first reading did not take place until March of this year. The second reading was held during a session of the Chamber of Deputies on April 14, 2026.
A significant shift concerns debt funds, as AIFMD II introduces the first comprehensive regulation of these entities. If an alternative fund actively lends and loans constitute a substantial part of its assets, it falls under the "loan-originating AIF" regime. This regime:
Prohibits the "originate-to-distribute" model (granting a loan solely for the purpose of its immediate sale).
Mandates a risk retention of at least 5% when transferring a loan.
Requires managers to adjust strategies, strengthen risk management, valuation, and portfolio monitoring, and perform regular stress tests.
Stricter rules for outsourcing have been introduced to prevent the creation of "letterbox companies"—entities where the manager is merely a formal shell without real control over the fund. Managers will now report to the Czech National Bank in greater detail. The role of the European Securities and Markets Authority (ESMA) is also being strengthened to harmonize supervision across the EU. Practically, this necessitates a review of outsourcing arrangements, a limitation on the excessive delegation of core functions, and the strengthening of internal teams. Furthermore, every manager must have at least two full-time senior employees.
Managers of open-ended funds must revise their founding documents to include selected Liquidity Management Tools (LMTs) and establish rules for their use. Additionally, the introduction of a European Depositary Passport opens the market for depositary services. Czech funds will benefit from a wider selection of depositaries, allowing them to utilize the services of prominent foreign banks without the requirement for those banks to establish a branch in the Czech Republic.
AIFMD II fundamentally alters the legal framework for alternative funds. While the original structure remains, significant new obligations have been added. As the incorporation of the directive into Czech law is currently in the legislative process, managers must closely monitor the lawmaker's next steps and begin preparing for the changes brought by the ZISIF Amendment.
[1] Directive (EU) 2024/927 of the European Parliament and of the Council of 13 March 2024 amending Directives 2011/61/EU and 2009/65/EC as regards delegation, liquidity risk management, supervisory reporting, provision of depositary and custody services and loan origination by alternative investment funds.
This text was translated by AI.
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