July 16, 2019

July 15, 2019

Subscribe to Latest Legal News and Analysis

ECON Votes To Adopt Draft Reports on Cross-Border Distribution of Collective Investment Funds

On December 4, the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a press release announcing that it has voted to adopt draft reports on the European Commission’s legislative proposals for a Regulation and a Directive on the cross-border distribution of collective investment funds. ECON initially published the draft reports in September 2018. 

The proposed Regulation sets out a harmonized framework concerning certain aspects of the cross-border distribution of funds, such as marketing communications and member states’ marketing requirements. The proposed Directive contains amendments to the Undertaking for the Collective Investment in Transferable Securities (UCITS) Directive and the Alternative Investment Fund Managers Directive relating to, among other things, pre-marketing and the discontinuation of marketing. (For further details on the Regulation and Directive proposals. 

In the press release containing the latest announcement, ECON highlights changes that it proposes to make to the EC’s proposal, including:

  • Marketing: communications targeted at small investors in funds should present a detailed account of risks, a summary of investors’ rights and information about national collective redress mechanisms in case of litigation.

  • Pre-marketing: pre-marketing of a fund, used to test the waters in a new country before it starts marketing activities, should not lead to any sales of investment units or shares. Moreover, prior to such activities, the manager should notify both its home Member State and the Member State in which the pre-marketing will take place.

  • De-notification: an investment fund should be able to cease its activities in a host Member State under certain conditions. The fund should make an offer to repurchase all UCITS units held by investors in such Member State, as well as make clear the consequences for investors, if they choose to continue to hold the units.

The press release is available here.

©2019 Katten Muchin Rosenman LLP


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...