Timeline to entry into force

On 14 June 2019, the package of legislative measures designed to reduce barriers to the cross-border distribution of funds (the CBDF Legislation) was adopted by the Council of the EU and will be signed into law on 20 June 2019.  Once signed, the CBDF Legislation will be published in the Official Journal and come into force 20 days following its publication.  Entry into force is expected to take place in the course of August 2019.

Key measures 

The CBDF Legislation, adopted in the form proposed by Parliament on 16 April 2019, incorporates a Directive amending the cross-border marketing provisions of both the UCITS Directive and AIFMD and a Regulation setting down additional requirements, most significantly in respect of disclosures to be included in marketing communications by AIFMs and UCITS management companies.  

Key new measures under the CBDF Legislation include:

1. the introduction of an ability for EU AIFMs to undertake “pre-marketing” (as defined) of established (not yet marketed) or not yet established AIFs in the EU;
2. the introduction of an ability for EU AIFMs and UCITS managers, who wish to discontinue marketing in a Member State, to withdraw notifications made to that Member State;
3. codification of an EU level framework for EU AIFMs marketing AIFs to retail investors;
4. removal of the requirement for UCITS managers to maintain a physical presence in the host Member State in which a UCITS is registered to market (EU AIFMs will also benefit from this under the new framework for marketing to retail investors); and
5. the imposition of EU level disclosure requirements for UCITS and AIF marketing communications.

The CBDF Legislation also formalises the decision to extend, until 31 December 2021, the exemption from the requirement for UCITS to produce a key information document under the Packaged Retail Investor Information Product (PRIIPs) legislation.

Transitional arrangements

The new measures referred to at 1 – 5 above will apply from 24 months after the publication.

Follow us @WilliamFryLaw