EU AIFMD New Rules

Pre-marketing and reverse solicitation

Leonard Ng, Co-head of the EU Financial Services Regulatory group, Sidley Austin

On April 16, 2019, the European Parliament voted in its plenary session to adopt a new legislative package relating to the cross-border distribution of collective investment funds. This legislative package will take the form both of a new directive (the CBDF Directive) and a new Regulation (the CBDF Regulation).

Amongst other changes, the new legislative package will amend the existing Alternative Investment Fund Managers Directive (AIFMD) with the objective of harmonising the ability for European Union (EU) alternative investment fund managers (AIFMs) to conduct preliminary fund marketing activities (pre-marketing) across the EU and setting out rules on reverse solicitation relating to such pre-marketing activities. 

The new marketing rules apply, for the most part, to EU-authorised AIFMs marketing their funds under the AIFMD marketing passport; they do not apply to non-EU AIFMs marketing funds in the EU under the AIFMD private placement regime. However, the AIFMD as a whole is likely to be reviewed during the latter part of 2019 and it seems likely that some of the new rules will then be applied to non-EU AIFMs who market their funds into the EU under the AIFMD private placement regime.

Certain of the new rules also apply to Undertakings for the Collective Investment in Transferable Securities (UCITS); however, the rules that are the focus of this update (pre-marketing and reverse solicitation) are relevant only for AIFMs marketing alternative investment funds (AIFs).

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