Latvia's Ministry of Finance has prepared draft amendments to the Alternative Investment Funds and their Managers Law, which the Cabinet of Ministers has reviewed, aimed at supporting the development of the alternative investment fund sector while reducing administrative burden. The package is designed to make the market more accessible for newly licensed fund managers, strengthen supervision, and update requirements in line with financial market developments. The draft refines rules for both licensed and registered managers, including enhanced registration requirements and more specific fit and proper expectations for shareholders and management, particularly in the area of anti-money laundering and counter-terrorist financing. It also proposes clearer reputation requirements, removal of obsolete provisions such as mandatory retention of transaction supporting documents, new general requirements for the issuance and distribution of fund units, updates to the framework for closed-end funds, and clarified obligations around the preparation of managers’ financial statements and depositary bank reports. In addition, it introduces a new approach to the fee for reviewing licensing applications and would give Latvijas Banka powers to impose a fine where a person acquires a holding in a registered manager without submitting a prior notification.

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