What does the Alternative Investment Fund Management Directive (AIFMD) regulate?

The Alternative Investment Fund Management Directive (AIFMD) specifically regulates the management and marketing of alternative investment funds (AIFs) within the European Union. This includes hedge funds, private equity funds, and real estate funds, which are all considered alternative investments as opposed to traditional investments like stocks or bonds.

The regulation's primary aim is to create a standardized framework for the governance of AIFs, enhancing transparency, protecting investors, and ensuring financial stability within the European financial market. By focusing on these types of investment vehicles, the AIFMD addresses the unique risks and management structures associated with alternative investments, making it a crucial component of the regulatory landscape for these asset classes.

The other options do not accurately reflect the scope of AIFMD: traditional investment vehicles are not its focus, commodities and foreign exchange markets fall under other regulations, and insurance companies have separate regulatory requirements concerning capital that are unrelated to AIFMD.