EU proposal to define "pre-marketing" under AIFMD

Belgium

Pre-marketing (of an alternative investment fund (“AIF”)) is not defined under the current Alternative Investment Fund Managers Directive 2011/61 (“AIFMD”). This has led to diverging approaches taken in EU member states by local regulators or sometimes there is no local guidance at all. In Belgium, the implementing alternative investment fund manager (“AIFM”) law did not clarify the position regarding pre-marketing, and the Financial Services and Markets Authority has so far not provided any guidance.

The European Commission intends to address these discrepancies by adopting a directive amending Directive 2009/65/EC and AIFMD with regard to cross-border distribution of collective investment funds, in order to include a definition of “pre-marketing” and to set out the conditions under which an AIFM can engage in pre-marketing activities.

The Commission’s proposal is to define “pre-marketing” as a “direct or indirect provision of information on investment strategies or investment ideas by an AIFM or on its behalf to professional investors domiciled or registered in the Union in order to test their interest in an AIF which is not yet established”. Member states will have to ensure that an authorized AIFM may engage in pre-marketing in the EU, except where the information presented to potential professional investors:

  • Relates to an established AIF;
  • Contains reference to an established AIF;
  • Enables investors to commit to acquiring units or shares of a particular AIF; or
  • Amounts to a prospectus, constitutional documents of a not-yet-established AIF, offering documents, subscription forms or similar documents, whether in draft or final form, allowing investors to take an investment decision.

Member states will have to ensure that an AIFM will not be required to notify pre-marketing activities

These proposals should be adopted by mid 2019 at the latest.