Empty Link Skip to Content

Update on Cross Border Distribution of Funds

Update on Cross Border Distribution of Funds

As outlined in our April newsletter, on 12 March 2018 the European Commission (“Commission”) published a proposed directive and proposed regulation amending the UCITS Directive and the Alternative Investment Fund Managers Directive (“AIFMD”) with regard to the cross border distribution of funds. The proposals would, among other matters:

  • insert a definition of “pre-marketing” in the AIFMD to allow alternative investment fund managers (“AIFMs”) to test an investment idea or investment strategy with professional investors;
  • prohibit member states from requiring physically present facilities in their territory for making payments to unitholders, repurchasing or redeeming units and making available the information that funds are required to provide; and
  • insert new provisions relating to the de-registration of funds where a manager no longer intends to market the fund in a member state.

On 15 June 2018, the Council of the EU (“Council”) adopted its negotiating mandate in relation to the proposals in its trialogue negotiations with the Commission and European Parliament. The Council has proposed a number of amendments to the Commission’s proposals, including significant changes to the provisions relating to pre-marketing and de-registration, which are outlined in the tables below.

The Commission’s proposals have yet to be considered by the European Parliament’s Economic and Monetary Affairs Committee (“ECON”).