European Commission eyes marketing rules overhaul

Barriers to cross-border fund distribution could be broken down after the consultation

The European Commission is considering changes to marketing rules, administration requirements and regulatory fees to reduce barriers to cross-border alternative investment fund distribution.

Its Inception Impact Assessment follows a consultation which found variations to marketing rules and procedures across member states are creating barriers to cross-border alternative investment fund distribution.

Changes under consideration include harmonizing national marketing requirements, practices and what constitutes marketing. The Commission also intends to clarify the application of marketing rules for online distribution.

The Commission also said it may create a central repository for information on regulatory fees and link the size of fees to the amount of supervisory work.

For notifications, it is considering a central hub, as well as simplifying the update notification process and amending the criteria for when an updating notification is required.

“If the Commission is referring here to AIFMD marketing material change notifications, then a relaxation of these requirements would be welcomed by EU managers,” law firm Fried Frank said in a client note.

The requirement for managers to provide their local regulator with one month’s notice before implementing certain changes (including, in some cases, changes negotiated by investors) has the potential to disturb the closing timeline, and often proves difficult in practice, the firm added.

IIAs inform “stakeholders” about some of the options available to the commission so they can comment. This consultation is open until 20 July and can be found here.