ESMA consults on standardized information to facilitate cross-border funds distribution

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ESMA consults on standardized information to facilitate cross-border funds distribution

2 April 2020

Regulatory News Alert

Context and objectives

On 31 March 2020, the European Securities and Markets Regulator (ESMA) launched a consultation on the standard forms, templates, and procedures that national competent authorities (NCAs) should use to publish information on their websites to facilitate cross-border distribution of funds under Regulation EU/2019/1156 on the facilitation of cross-border distribution of collective investment undertakings.

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The consultation paper represents the first stage in the development of the draft ITS in relation to the following:

  • NCAs publishing national provisions concerning marketing requirements applicable within their jurisdiction on their websites
  • NCAs publishing national provisions concerning fees and charges levied by them in relation to activities of AIFMs, EuVECA managers, EuSEF managers, and UCITS management companies on their websites
  • Information to be communicated by the NCAs, which is necessary for the creation and maintenance of the central database on cross-border marketing of AIFs and UCITS.

The aim is to offer increasing coherence and publicity about the different approaches proposed by NCAs.


Publication of marketing requirements on NCA websites

From August 2021, with the aim of enhancing investors’ protection and facilitating asset managers’ market access, NCAs will be required to publish and maintain, on their websites, up-to-date and complete information on the applicable national laws, regulations, and administrative provisions governing marketing requirements for AIFs and UCITS, and the summaries thereof.

ESMA proposes that the requirements applicable to the marketing of UCITS and of AIFs existing under national law, on both a domestic and a cross-border basis, should be clearly identifiable on NCA websites. In addition, summaries of the requirements shall also be made available and be concise, clear, easy to read, and give sufficient information to understand the main requirements for marketing in a Member State. The format of the publication and summaries remains flexible and at the discretion of each NCA.


Publication of regulatory fees and charges on NCA websites

NCAs are required to publish and maintain, on their websites, information regarding the fees they levy for carrying out their duties in relation to the cross-border activities of AIFMs, EuVECA managers, EuSEF managers, and UCITS management companies. As an alternative, NCAs can choose to publish the calculation methodologies for those fees or charges instead of the fees themselves.

ESMA suggested that the publication of regulatory fees be harmonized across all NCAs. This will be done in the form of a table, listing the name or description of the fee, the legal basis for such a fee, the entity required to pay the fee, the activity for which the fee is levied, and a description of the fee breakdown including the fixed fee or the percentage to be paid. An explanatory text may be added alongside the table.


ESMA database listing funds marketed on a cross-border basis

By February 2022, ESMA will be required to publish on its website, a central database on cross-border marketing of AIFs and UCITS, listing all AIFs and UCITS that are marketed in a host Member State, their AIFM, EuSEF manager, EuVECA manager, or UCITS management company, and the Member States in which they are marketed.
While ESMA is not consulting on the ITS related to the database, it has asked stakeholders to specify how they intend to make use of the database and requested suggestions with regards to the format of the database.


Next steps

All interested parties, in particular, AIFMs, UCITS management companies, EuSEF managers, and/or EuVECA managers and their trade associations, distributors of UCITS, AIFs, EuSEFs and EuVECAs, as well as institutional and retail investors investing into UCITS, AIFs, EuSEFs and/or EuVECAs and their associations should send comments for this consultation by 30 June 2020.

ESMA will publish a final report on the feedback it receives by 2 February 2021, with target application from 1st August 2021.


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Contacts

Cross-border fund distribution services

Lou Kiesch
Partner – Financial Industry Solutions
Tel: +352 45145 2456
lkiesch@deloitte.lu

François-Kim Hugé
Partner – Financial Industry Solutions
Tel : +352 45145 2483
fkhuge@deloitte.lu

Marie-Anne Mandroux
Senior Manager – Financial Industry Solutions
Tel: +352 45145 2234
mmandroux@deloitte.lu

Doriane Hardy
Consultant – Financial Industry Solutions
Tel : +352 45145 2463
dohardy@deloitte.lu


Regulatory Watch Kaleidoscope service

Simon Ramos
Partner – IM Advisory & Consulting
Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Jean-Philippe Peters
Partner – Risk Advisory
Tel : +352 45145 2276
jppeters@deloitte.lu

Benoit Sauvage
Director – RegWatch, Strategy & Consulting
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Strategy Regulatory & Corporate Finance
Tel : +352 45145 2311
mvuksic@deloitte.lu

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