Delegation or Distribution? AIFMD II Leaves the Boards to Decide

We aim above the mark to hit the mark.

Ralph Waldo Emerson

For years, boards of UCITS Manco and AIFM operated under a common understanding:

Appoint a distributor —any distributor— and you’re delegating distribution function. That meant full delegation oversight. Due diligence, monitoring, board accountability. Formally or not, all roads led to the same governance obligations.

But new AIFMD II rules come to unsettle that logic.

In an underappreciated shift, the directive introduces a new distinction between distributors acting on behalf of the UCITS Manco/AIFM and those acting on their own behalf. The latter no longer treated as delegates.

This seemingly technical change has wider implications.

Delegation rules, oversight duties, and ESMA reporting now apply only to on behalf arrangements.

The existence of a distribution agreement will not be a determining factor.

Acting on own behalf remains undefined, except for a scholastic reference to financial advisors marketing funds without the manager’s knowledge.

For boards of management companies, the challenge is immediate.

Without regulatory clarity, two interpretations may emerge:

A broader one, where any MiFID-licensed distributor is presumed independent.

A more restrictive one, limiting independence to platforms, banks, and retail wealth channels—excluding specialist third-party marketers.