The purpose of this Insights post is to consider some practical issues for alternative investment fund managers (“AIFMs”) when undertaking pre-marketing/marketing activities in the European Union following the implementation of the Cross Border Distribution of Funds Directive (the “Directive”).
Marketing and Discontinuation of Marketing
The CSSF issued on 12 June 2022 Circular 22/810 (available here) on certain notifications procedures, including for the marketing (and discontinuation of the marketing) of units of UCITS and pre-marketing in Luxembourg or another Member State by Luxembourg-based AIFMs to the following entities:
- Luxembourg UCITs;
- Luxembourg AIFMs wishing to notify arrangements or de-notify arrangements made for marketing in Luxembourg of units or shares of an EU AIF that they manage in accordance with Article 29 respectively Article 29-1 of the AIFM Law;
- Luxembourg AIFMs wishing to notify arrangements or de-notify arrangements made for marketing in another Member State of units or shares of an EU AIF that they manage in accordance with Article 30 respectively Article 30-1 of the AIFM Law; and
- Managers of Luxembourg EuVECAs or EuSEFs wishing to market in Luxembourg or another Member State.
The AIFMs also include Luxembourg AIFMs of European long-term investment funds (“ELTIFs”) that wish to (de-)notify arrangements for marketing of units or shares of ELTIFs in accordance with Articles 29, 29-1, 30 and 30-1 of the AIFM Law, respectively.
All above-mentioned entities must comply with the marketing notification and de-notification procedures, are exclusively available via the CSSF eDesk portal since 1 July 2022. The list of relevant procedures can be found on the eDesk homepage.
This list will be updated regularly and further information and instructions in the form of a user guide will also be made available on eDesk.
However, it remains that the Pre-Marketing Notification Letter or any changes thereto must be sent to the following email address: firstname.lastname@example.org.
Depending on the location of the alternative investment fund (“AIF”) and the investors involved, AIFMs will be subject to one of the following Pre-Marketing Notification Letter Forms:
- Pre-marketing by Luxembourg AIFMs to potential professional investors in Luxembourg and other EU Member States shall send a duly completed and signed Pre-Marketing Notification Letter (form here) to the CSSF within two weeks of starting pre-marketing;
- Pre-marketing by EU AIFMs engaging non-EU AIFs in pre-marketing to potential professional investors in Luxembourg shall send a duly completed and signed Pre-Marketing Notification Letter (form for Luxembourg AIFMs here) and a Pre-Marketing Notification Letter Art. 37 (form for non-Luxembourg EU AIFMs here) directly to the CSSF and not to the authorities of their home Member State within two weeks of it having begun pre-marketing; and
- Non-EU AIFMs engaging in pre-marketing to potential professional investors in Luxembourg shall send a duly completed and signed Pre-Marketing Notification Letter (form here) to CSSF within two weeks of it having begun pre-marketing.
The notification letter must include the detail about the period during which the pre-marketing is taking place, description of pre-marketing activities and a list of AIFs or Sub-Funds AIF if applicable.
The Marketing Rules also specified conditions for pre-marketing by AIFMs. As a consequence, AIFMs must be aware that no pre-marketing is allowed where the information presented to potential professional investors:
- Is sufficient to allow investors to commit to acquiring units or shares of a particular AIF;
- Amounts to subscription forms or similar documents whether in a draft or a final form; or
- Amounts to constitutional documents, a prospectus or offering documents of a not-yet-established AIF in a final form.
Feel free to get in touch with us for any further information.
Bill Toussaint was a contributing author to this Insights post.
Alexandrine Armstrong-CerfontainePartnerChair, Luxembourg Office