ESMA publishes final report and draft ITS on information to facilitate cross-border funds distribution

Context and objectives

On 1 February 2021, the European Securities and Markets Authority (ESMA) published its final report and draft of the implementing technical standards (ITS) under Regulation EU/2019/1156 on the facilitation of cross-border distribution of collective investment undertakings. The draft ITS specify standard forms, templates and procedures for the publication of information by European Union National Competent Authorities (NCAs) on their websites and for NCAs to notify ESMA regarding national marketing requirements, regulatory fees and charges, and funds distributed on a cross-border basis. This report was issued in response to a consultation paper published by ESMA on 31 March 2020¹.

1. Publication of marketing requirements on NCA websites

In accordance with Article 5 of Regulation EU/2019/1156, from 2 August 2021, 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 the marketing requirements for AIFs and UCITS (collectively referred to hereinafter as “the Local Regulatory Framework”), and the summaries thereof.

The draft ITS state that this information shall be published and kept up-to-date and complete on a single dedicated webpage of the NCA’s website or on separate webpages, which will respectively set out the Local Regulatory Framework that applies to the marketing of UCITS and AIFs. In addition, summaries of the Local Regulatory Framework will also have to be made available on the same webpage of the NCA’s website, either at the top or bottom of the relevant webpage, in a clear and concise manner, using a specific template that is annexed to the ITS.

NCAs will have to comply with these requirements and provide ESMA with the hyperlinks to their websites where the information is provided as of 2 August 2021. They will need to notify ESMA of any changes to these hyperlinks and the information published on the relevant webpages within 10 working days following the change.

2. Publication of regulatory fees and charges on NCA websites

NCAs are required to publish and maintain an up-to-date list, on their website, of the fees and charges they levy for carrying out their duties regarding the cross-border activities of, in particular, AIFMs and UCITS management companies or, if applicable, the calculation methodologies for such fees or charges.

The publication of regulatory fees will need to follow a specific template, which is annexed to the ITS.

This shall be done in the form of a table, which covers the regulatory fees for both the cross-border management and the cross-border marketing of investment funds. For each fee, the NCA will be required to list the name or description of the fee, the legal basis for such 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 calculation methodology of the fee to be paid. An explanatory text may be added alongside the table.

NCAs will have to comply with these requirements and provide ESMA with the hyperlinks to their websites where the information is provided as of the date of entry into force of the ITS. They will need to notify ESMA of any changes to these hyperlinks and the information published on the relevant webpages within 10 working days following the change.

3. ESMA database listing funds marketed on a cross-border basis

By February 2022, ESMA will be required to publish a central database on the cross-border marketing of AIFs and UCITS on its website, listing all AIFs and UCITS that are marketed in a host Member State, their AIFM or UCITS management company amongst others, and the Member States in which they are marketed.

To assist ESMA in creating and maintaining this database, NCAs will have to report specific information to ESMA on a quarterly basis and will have to comply with this requirement as from 2 February 2022.

Next steps

ESMA has submitted the draft ITS to the European Commission. From the date of submission, the European Commission will have three months to decide whether to adopt the ITS. The European Commission can extend this period by one month.

For more details about the draft ITS, please click here.

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