Reed Smith Client Alerts

The EU Commission on 12 March 2018 issued proposals for a new Directive and new Regulation intended to “boost the cross-border market for investment funds” and “eliminate current regulatory barriers to the cross-border distribution of investment funds in order to enable a better functioning Single Market and economies of scale”. It is unlikely to surprise anyone who has been involved in the long-running saga of implementation of the Alternative Investment Fund Managers Directive (AIFMD) to discover that the provisions of the new draft legislation are likely to be seen by fund managers as further restricting, rather than liberalising, their ability to market and raise money across the EU.

Authors: Tim Dolan

Gavel and EU flag


Key provisions of the new draft legislation as it applies to alternative investment fund managers (AIFMs) and their funds (AIFs) include:

  • A new, very restrictive, definition of pre-marketing which impliedly changes the type of marketing for which regulatory advance notifications and approvals are required.
  • New obligations applying to all marketing communications.
  • Restrictions on the circumstances in which an AIFM can give notice that it has ceased marketing in an EU jurisdiction, including a new obligation to offer to buy out any investors in that jurisdiction before such a notice can be given.
  • Express confirmation that national regulators can levy fees and charges in relation to cross-border marketing.
  • New obligations to maintain payment and information provision facilities in any Member State in which an AIF is marketed to retail investors.
  • Express confirmation that national regulators can require AIFMs to submit all their marketing material for approval if they market to retail investors.
  • More information to be held centrally by the European Securities Markets Authority ESMA.