Cross-Border Fund Distribution Update

I. CSSF publishes Circular 22/795 on the application of ESMA guidelines on marketing communications

On 30 January 2022, the CSSF published Circular 22/795 concerning the application of ESMA guidelines on marketing communications (“ESMA Guidelines”) under Regulation (EU) 2019/1156 on the cross-border distribution of funds (“CBDF Regulation”), which were published on 2 August 2021.

CSSF Circular 22/795 applies as from 2 February 2022, which is also the date of application of ESMA Guidelines, whilst the marketing communication requirements set out in the CBDF Regulation have been applicable since 2 August 2021.

Background

As a reminder, ESMA Guidelines specify the application of the marketing communications requirements set out in Article 4 of the CBDF Regulation, which have to be complied with by UCITS management companies (“UCITS ManCos”) and alternative investment fund managers (“AIFMs”).

In particular, ESMA establishes common principles in respect of the identification as such of marketing communications for UCITS/AIFs, the description of risks and rewards of purchasing units/shares of a UCITS/AIF in an equally prominent manner, and the fair, clear and non-misleading character of marketing communications, by taking into account also the online aspects of such marketing communications.

Key Points of Circular 22/795

In its Circular 22/795, the CSSF confirms that it applies and integrates ESMA Guidelines into its administrative practices and regulatory approach, and further addresses the following points:

1. 1. In-scope Luxembourg investment fund managers (“IFMs”) – The CSSF requires Luxembourg UCITS ManCos, authorised AIFMs, self-managed UCITS investment companies and internally managed authorised AIFs, as well as Luxembourg managers of EuVECAs/EuSEFs (within the meaning of the EuVECA/EuSEF Regulations) to duly comply with ESMA Guidelines. Non-EU AIFMs are not covered by the scope of Circular 22/795.
2. 2. Assessment of marketing communication by IFMs – The CSSF considers that it is up to the above Luxembourg IFMs to assess, based on the positive/negative examples of marketing communications mentioned in ESMA Guidelines, whether or not a certain message or communication addressed to investors or potential investors qualifies as “marketing communication”.
3. 3. Information to be provided by IFMs and verification by the CSSF – The CSSF requires IFMs to provide it with information regarding marketing communications and announces in Circular 22/795 that it will conduct testing to verify their compliance with the applicable marketing communication requirements under Article 4 of the CBDF Regulation and ESMA Guidelines. The practical and/or technical aspects (including frequency, formats, channel of submission) of the implementation of the above collection of information will be communicated by means of additional Annexes to Circular 22/795 and supplemented by a FAQ.

II. ESMA publishes the list of hyperlinks and summaries of national marketing requirements

On 2 February 2022, ESMA published on its website the list of hyperlinks to the websites of national competent authorities where the complete and up-to-date information on the applicable national laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS is published, along with the summaries therof, and the list of hyperlinks to the webpages of national competent authorities where the list of regulatory fees and charges is published.