Cross-border fund distribution: ESMA consults on guidance for marketing communications


Cross-border fund distribution: ESMA consults on guidance for fund marketing communications

11 November 2020

Regulatory News Alert

Context and objectives

On 9 November 2020, the European Securities and Markets Authority (ESMA) launched a consultation on the draft guidelines on marketing communications under the Regulation (EU) 2019/1156 of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings (CBR).

According to Article 4(1) of the CBR, these guidelines apply to the following fund managers: undertakings for collective investments in transferable securities (UCITS) management companies (including any UCITS not designated as a UCITS management company), alternative investment fund (AIF) managers, European venture capital fund (EuVECA) managers and European social entrepreneurship fund (EuSEF) managers. 

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These fund managers shall ensure that:

  • All marketing communications addressed to investors are identifiable as such;
  • They describe the risks and rewards of purchasing units or shares of an AIF or units of a UCITS in an equally prominent manner; and
  • All information included in marketing communications is fair, clear and not misleading.


Marketing communications in scope

The guidelines shall apply to all marketing communications addressed to investors in UCITS and AIFs, including those set up as EuVECAs, EuSEFs, European long-term investment funds (ELTIFs) and money market funds (MMFs). These include:

  • All online advertising messages for a UCITS or AIF, as well as webpages, video presentations, live presentations, radio messages or factsheets.
  • Messages published on any social media platform.
  • Marketing materials addressed individually to investors or potential investors, as well as documents or presentations made available by a fund manager to the public on its website or in any other location.
  • Communications advertising a UCITS or AIF addressed to investors or potential investors located in the home Member State (MS) of the fund manager or in a host MS.
  • Communications describing the characteristics of a UCITS or AIF.
  • Communications by a third party that is used by a fund manager for marketing purposes.


Common principles for marketing communications

As specified in Article 4(6) of the CBR, these guidelines aim to specify the requirements for marketing communications as set out in Article 4(1) of the CBR, in particular:

  • “Identification of marketing communications as such”: these communications should include a short disclaimer to:

        o   Make it clear that they have a marketing aim;

        o   Draw the attention of investors or potential investors to the fact that an investment decision should not be
             based on this marketing communication only; and

        o   Mention the existence of the legal and regulatory documents of the promoted fund.


  • “Description of risks and rewards in an equally prominent manner”: the format of the description should allow investors or potential investors to identify the promoted fund’s risks and rewards in a clear and easily understandable manner:

        o   The font, size and position used to describe the rewards should be the same as those used to describe the risks;

        o   Information of the risks should not be disclosed in a footnote or in small characters within the main body of the              communication; and

        o   Both the risks and rewards should be mentioned either at the same level or one immediately after the other.


  • “Fair, clear and not misleading character of marketing communications”: all marketing communications should be consistent with, and not contrary to, the legal and regulatory documents of the promoted fund (such as the fund’s investment policy, underlying assets, any information on costs, etc.).


Next steps

ESMA invites feedback from interested stakeholders on the proposed guidelines by 8 February 2021 and will consider this feedback with a view to issuing final guidelines by 2 August 2021 at the latest.

The guidelines will apply either from their publication date or from 2 August 2021, whichever comes first.


How can Deloitte help you?

Deloitte’s advisory specialists and dedicated services can help you master marketing compliance challenges. Our marketing compliance services are fully modular to suit your specific needs, from reviewing your marketing materials to providing regulatory watch assistance. You pick and choose, and we take care of the rest!

With our Regulatory Watch Kaleidoscope service, Deloitte helps you stay ahead of the regulatory curve by identifying changes to your environment and to better anticipate, manage and plan for upcoming regulations.

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Our Registration Insights web-based application enables you to stay ahead of regulatory changes and keep up to date with the regulatory landscape and market trends relating to the cross-border distribution of funds.


Subject matter specialists

Lou Kiesch
Partner – Regulatory Consulting Leader
Tel: +352 45145 2456

François-Kim Hugé
Partner - Fund Registration Services
Tel : +352 45145 2483

Xavier Zaegel
Partner - Consulting – IM & PERE Leader
Tel: +352 45145 2748

Sylvain Crepin
Partner - Capital Markets/Financial Risk
Tel: +352 45145 4054

Regulatory Watch Kaleidoscope service

Simon Ramos
Partner – IM Advisory & Consulting 
Tel: +352 45145 2702

Jean-Philippe Peters
Partner – Risk Advisory
Tel : +352 45145 2276

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