The Revised Cross-Border Distribution of Funds Regime
The 2nd August 2021 marks the coming into force of the revisions to the Cross-Border Distribution of Funds (‘CBDF’)Regime in terms of Directive 2019/1160 and amendments to Regulation 2019/1156. The scope of the changes is to ensure a level playing field among AIFMs, self-managed AIFs, UCITS management companies, self-managed UCITS and EuVECA / EuSEF managers, whilst also enhancing investor protection.
The CBDF Regulation introduces new marketing communication requirements, whilst the CBDF Directive defines and sets conditions for pre-marketing, de-notification arrangements and notification procedures. Fund managers are required to ascertain that communications are clearly identifiable as a means of marketing when addressing such types of communications to investors. The CBDF regulations also highlight the importance of disclosing clear and accurate information to investors in terms of the marketing communications, including a specific disclaimer to that effect.
The European Securities and Markets Authority (ESMA) has also published guidelines which apply to fund managers and self-managed funds when issuing marketing communications. The guidelines further specify the manner in which disclosures should be made, but are not intended to replace existing national requirements on the information to be included in marketing communications, such as those relating to fiscal treatment of the investment.
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