On 1 July 2021, the European Securities and Markets Authority (ESMA) submitted to the European Parliament, the European Council and the European Commission its first report on national rules governing the marketing of investment funds under the regulation on cross-border distribution of funds.
In order to prepare this report, ESMA asked the National Competent Authorities (NCAs) of all EU and European Economic Area Member States to provide a summary of their national laws, regulations and administrative provisions governing the marketing requirements of UCITS and AIFs in their jurisdiction. Interestingly, the rules relating to marketing by third country AIFMs and registered AIFMs are also included in some of the responses.
Based on the information provided by NCAs in their responses it appears that the national laws, regulations and administrative provisions governing marketing requirements are usually based on the provisions of Directive 2009/65/EC (the “UCITS Directive”) and Directive 2011/61/EU (the “AIFMD”), although NCAs’ responses showed many additional requirements imposed by Member States to further regulate the marketing of UCITS or AIFs in their jurisdiction.
With respect to the verification of marketing communications, a large number of NCAs indicated that no national rules required the ex-ante or ex-post verification of marketing communications, or that such verifications were not part of their supervisory practice. It also appeared that little harmonisation exists in respect of de-notification of arrangements made for cross-border marketing because only a limited number of Member States have adopted rules setting-out a formal process for de-notification.
Finally, it should be mentioned that there are diverging rules and practices as regards the obligation for UCITS management companies and AIFMs to appoint a local third-party to serve as a contact point in host Member States in order to carry out marketing activities.
It should however be noted that harmonisation of the rules governing verification of marketing communications, de-notification of arrangements made for marketing and the obligation to have a local presence in host Member States, have been addressed by Directive (EU) 2019/1160 (the “cross-border funds’ distribution Directive” or CBFD Directive). Since the deadline for transposing the CBFD Directive is on 2 August 2021, the current state of national legislations does not yet reflect the expected harmonisation. It can be expected that a greater level of convergence will be achieved in national legislations governing these requirements after the transposition of the CBFD Directive.
ESMA’s report can be found here.
Directive 2019/1160 can be found here.
Our previous blog post can be found here.