April the 16th, EU Plenary session: the European Parliament has adopted the proposal EU Directive on cross-border distribution of investment funds improving the regulatory framework for the distribution of investment funds in the EU. This Directive is part of the Capital Markets Union (CMU) initiative and includes measures to reduce national regulatory barriers having a negative impact on UCITS and AIFM marketing passports; more broadly, this Directive harmonises the regulatory and supervisory approach on cross-border distribution of both UCITS and AIF products.
This Directive on cross-border distribution of investment funds will amend the UCITS Directive (2009/65/EC), the AIFM Directive (2011/61/EU) , as well as related regulations.
The main changes to the UCITS Directive (2009/65/EC) are :
- Harmonisation of the local facilities to be provided in each EU cross-border market (new)
- Written notice procedure harmonised on AIFMD approach: UCITS-to-Home and a Home-to-Host to replace the current UCITS-to-Host approach (change)
- Provision of a harmonised deregistration procedure on discontinuation of marketing in a EU market (new)
The main changes to the AIFM Directive (2011/61/EU) are :
- Provision of a harmonised pre-marketing regime in each EU markets (new)
- Provision of a harmonised deregistration procedure on discontinuation of marketing in a EU market (new)
- Consistency, harmonisation and alignment on the UCITS playing field of the domestic regimes applicable to the marketing of AIF to retail investors (change)
The main topics to the Regulation on facilitating cross-border distribution of collective investment schemes (CIS) are :
- High level EU framework for marketing communication (new)
- General rules applicable to regulatory fees in each EU market (new)
- Reinforcement of ESMA in the streamlining of information flows and the maintenance of public registers related to the distribution in EU cross-border markets (new)
The main changes to the Regulations (EU) No 345/2013 and No 346/2013 are :
- Provision of a pre-marketing regime across EU markets for European Venture Capital Funds (EVCF) and European Social Entrepreneurship Funds (ESEF) (new)
Time Frame
The Directive shall enter into force 20 days after its publication in the Official Journal of the European Union; a transposition period of maximum 24 months is provided for each EU Member State to adopt and publish its amended Laws, Regulations and any applicable provisions.
The Regulations shall enter into force 20 days after their publication in the Official Journal of the European Union.
In both cases, an evaluation period of 36 months is provided for the Commission to conduct an evaluation on the basis of a public consultation and discussions with ESMA and the local competent authorities.
We would be happy to discuss this Directive in more detail. Feel free to contact us for more information.