Winning the Regulatory Reporting Game

5 Best Practices for Annex IV Reporting

In 2014, the Alternative Investment Fund Managers Directive (AIFMD) introduced reporting requirements via Annex IV for EU fund managers, and those marketing funds into the EU above a certain AUM threshold. Regulators are using the report, which collects information on each AIFM, as a way to monitor systemic risk in the alternative fund industry. AIFMs are required to file information quarterly, semi-annually or annually, broadly depending on the fund manager’s assets under management.

The requirement is posing a real pain for the compliance and operations teams in management firms who have had to question if their data, technology and service provider engagements are up to the challenge of Annex IV reporting. Three years on, with numerous reporting cycles under our belts, here are 5 best practices that we’ve learned so far to ensure compliant and consistent Annex IV reporting.


1. Prepare Early

Annex IV requires significant data collection to answer approximately 300 data points including information on instruments traded, exposures, assets under management (AUM) and liquidity profiles, to name but a few.

With the Annex IV deadlines being so tight, 30 days after the end of each quarter, and 45 days for fund of funds, fund managers must ensure that they keep adequate internal records and have the appropriate systems in place to acquire the required reporting data promptly at the end of the reporting period. When relying on a fund administrator for information, it is important to ensure that data is sent promptly after the reporting period end date.  Admins tend to give too much information or not enough, so extra time is needed to extract and transform the required data to meet the regulatory specifications.


2. Use Assumptions

Initially the guidance for Annex IV was limited, and even now, 3 years on, proper interpretation of the report questions is not always easy. Advisers can find it difficult to determine what calculation methodologies to use, which asset types to include, or how to classify their investors. Certain guidance can be found in ESMA’s technical guidance and on each NCA’s website, but when faced with uncertainty, fund managers should detail methodologies and assumptions on which their report answers are based in the Assumptions section of the report.


3. Know Where to Submit

EU AIFMs may take advantage of the passport regime under which they are required only to submit one Annex IV report to their national regulator. However, Non-EU AIFMs marketing funds into EU member states via the national private placement regimes must supply Annex IV to each of the jurisdictions in which they are marketing into. This means they are required to submit to multiple regulators, who each have different NCA codes and may require submission of the report in different formats. Hence, it is vital for fund managers to be aware of where they are required to submit and the report format required by each regulator.

4. Keep Abreast of Regulatory Updates

In the dynamic regulatory reporting environment, fund managers are expected to remain current with the latest regulatory updates. From quarter to quarter, reporting regulation and guidance can change, therefore, it is vital to keep abreast of any updates to report question methodologies e.g. classifications of assets and calculation of exposures. Regulatory updates are available in ESMA’s Library (  and also on each NCA’s site. The FCA’s Questions and Answers publication is invaluable for asset managers submitting in the UK and is regularly updated.

5. Consider Outsourcing & Technology Solutions

The cost associated with internalising the reporting process by building and resourcing the infrastructure and systems used to compile Annex IV in-house is expensive and can be costly to update should the regulatory requirements change.

Outsourcing the reporting process allows compliance and operations teams to focus on their day jobs, freeing up resources and time. Using technology, third party vendors can take over the arduous data management and aggregation involved in compiling the Annex IV report and offer managers consistent and accurate reporting across multiple regulatory forms.


All in all, the regulator’s post-crisis shift to more stringent management of systemic risk in the alternative fund industry through the introduction of new reporting requirements such as Annex IV is forcing AIFMs to take a proactive approach to managing their data, systems and processes to remain compliant. Managers need to determine whether they are confident using their own resources to take on the Annex IV reporting process internally or whether it’s worth enlisting the help of outsourced regulatory specialists and technology providers to handle the work.

Claire Brennan

Claire joined FinTrU through our first Financial Services Academy in 2014 after graduating from the University of Manchester with a BSc in Mathematics. Claire has since been promoted to Associate within FinTrU and has continued to expand her knowledge of the financial services industry having obtained the CISI Investment Operations Certificate & passed Level I of the CFA Program.

Since joining FinTrU, Claire has worked on the Regulatory Reporting Team for a leading Financial Technology firm. As part of this team, Claire works with technology to provide the solution to regulatory filings for fund managers, who have recently been compelled to report to regulators on a continuous basis. Claire assists clients with the completion of Annex IV, Form PF and CPO-PQR reports. Compliance with each of these mandates requires the collection and aggregation of fund data for the generation of the reports.

Claire coordinates with fund managers and their administrators to source, enrich & transform data required for each report in order to meet the regulator’s specifications. Throughout this process, Claire offers clients system support on the software and advice on the regulatory requirements.