Pre-Marketing Under AIFMD: The 18-Month Rule Regulation
The European Parliament's draft report on the cross-border distribution of collective investment schemes has influenced proposals to harmonise pre-marketing regulations under the Alternative Investment Fund Managers Directive (AIFMD).
These proposals build on the introduction of a new harmonised pre-marketing regime established by the Cross-Border Distribution Framework (CBDF) directive, which mandates uniform rules across EU Member States since August 2, 2021.
The key proposed changes and clarifications include:
- Definition and Scope: Pre-marketing is defined as the provision of information or communication by EU AIFMs to potential professional investors to test interest in a fund or compartment that is not yet fully established or notified for marketing. This activity must not be an offer or placement of units or shares.
- Uniform Application Across Member States: The CBDF directive stipulates that national rules cannot create disadvantages for EU AIFMs compared with non-EU AIFMs, promoting a level playing field. Some Member States may align their national private placement regimes accordingly.
- Notification Requirements: In some jurisdictions, fund managers must notify regulators within two weeks of commencing pre-marketing activities, ensuring regulatory oversight of this stage.
- Limited Changes in AIFMD II: While the marketing framework was significantly updated by CBDF, AIFMD II reforms mainly focus on third-country provisions and updating standards references but maintain the core harmonised pre-marketing regime introduced by CBDF.
The European Parliament’s draft report emphasises further harmonisation and clarity around these pre-marketing rules to facilitate smoother cross-border fund distribution without unnecessary regulatory fragmentation or barriers.
In summary, the proposed changes seek to embed and clarify the harmonised pre-marketing regime introduced by CBDF in AIFMD, ensuring consistent application across Member States, promoting transparency via regulatory notifications, and preventing discriminatory rules between EU and non-EU fund managers in the cross-border distribution context.
[1] European Parliament and Council of the European Union, Directive (EU) 2019/1160 of 20 June 2019 amending Directive 2011/61/EU on Alternative Investment Fund Managers and amending Directives 2003/41/EC, 2009/65/EC and 2011/36/EU (the Cross-Border Distribution Framework)
[2] European Securities and Markets Authority, Guidelines on the application of the AIFMD marketing passport for non-EU AIFMs (ESMA70-148-2043)
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- The European Parliament's draft report is emphasizing the need for further clarity and harmonization in the policy-and-legislation regarding pre-marketing rules, which are crucial for the cross-border distribution of collective investment schemes within business and finance, with the aim of ensuring smoother distribution without unnecessary regulatory fragmentation or barriers.
- The proposed changes in the pre-marketing regulations under the Alternative Investment Fund Managers Directive (AIFMD) are aligned with the introduction of a new harmonized pre-marketing regime established by the Cross-Border Distribution Framework (CBDF) directive, aiming to promote transparency, prevent discriminatory rules, and ensure consistent application across all Member States, impacting both business and politics.
