ESMA Consultation on UCITS Crossborder Marketing Notification

ESMA Consultation on UCITS Crossborder Marketing Notification

ESMA just kicked off one more interesting summer project, with a very recent consultation – closing on September 9th – on the technical standards for AIF and UCITS crossborder marketing notification.  Given that the introduction of the so-called Cross Border Distribution Directive took place over the summer of summer of 2021 there seems to be a strange relation between summer time and UCITS Crossborder marketing notifications.

The present consultation is rather broad in scope and encompasses UCITS and AIFs crossborder marketing as well as management, with the introduction, amongst other things, of new templates for the letters to be used for AIF and UCITS crossborder marketing notification.

Get in touch here with your contacts at Veneziano & Partners to see how we can help with UCITS crossborder marketing notification.


The Why

Backdrop to this consultation is the Capital Markets Union, whose action plan ambitiously aims at facilitating UCITS and AIFs crossborder distribution and supervision. It is in this same context that we also saw some of the most recent regulatory endeavours, like the Crossborder Distribution Directive and Regulation, as well as the ESMA Guidelines on marketing communications.

With this consultation, ESMA is developing the optional implementing and regulatory technical standards referred to in both the UCITS directive and the AIFMD for what concerns the crossborder marketing and management of funds. The regulatory technical standards (RTS) are being developed to specify the information that management companies and AIFMs will have to notify to home and host state national competent authorities when planning to carry out their activities in member states other than the ones of the establishment.

The implementing technical standards (ITS) instead specify the form and content of the notification letters to be used for AIF and UCITS crossborder marketing notification, as well as crossborder management of UCITS and AIF by management companies and AIFMs.

The What

For what concerns specifically the letters for AIF and UCITS Crossborder marketing notification, ESMA developed a completely new template designed to accommodate into greater details the requirements recently introduced by the Crossborder distribution directive.

Whilst templates letter for UCITS crossborder marketing notifications were updated already with the introduction of the Crossborder distribution directive, the template introduced by the ITS, if adopted as it currently stands, will impose a greater level of details on managers and promoters of UCITS funds intending to market crossborder in Europe.

The bulk of the changes seems to affect the section related to marketing arrangements. In addition to the request of specific contact details of each third-party distributor in the host Member State at issue, the template requires a short description of the envisaged marketing strategy and the related marketing means deployed at fund level in the specific host member state. This specific point is subject to consultation and stakeholders are expected to contribute also with an indication of supporting documentation, if any, that could be provided as part of the description of the marketing strategy.

Whilst for the time being not introduced in the template letter for UCITS Crossborder marketing notification contained in the ITS, the anticipated level of assets to be raised in host Member States could also become part of the set of information on marketing to be provided at the time of an initial notification. The consultation leaves the question open as to whether information on minimum and maximum capital raising target, expected duration of marketing, and revenue treatment will be information readily available at the time when notifying the intention to market a UCITS.

The so What

In principle, the Capital Markets Union should facilitate the crossborder marketing of AIFs and UCITS, allowing for less established and smaller funds to be able to reach new audiences across Europe in an easier fashion. And whilst some of the measures introduced during this journey have indeed alleviated the burden on crossborder distribution, we believe it would be a fair conclusion to say that additional formalities have been introduced, which could amount to new obstacles themselves.

For what concerns the ITS and the letter for AIF and UCITS crossborder marketing notification, we note that there is an increased level of details required on managers and promoters of funds intending to offer crossborder. One example, contained in the section of the notification letter on compliance with marketing requirements, is related to the request of the provision of contact details of a third-party distributor.

The adopted version of the Crossborder Distribution Directive, for what concerns UCITS, does not contain any provisions on pre-marketing, indeed contained in one of the very early drafts. Considering that one of the ways to be able to test and obtain an interest in third-party distributors is to present them a fund, which could per se amount to marketing and require a marketing notification first, being able to provide these details before at the time when making a marketing notification can be problematic. Also, new entrants and smaller UCITS funds will be at a disadvantage compared to more established and bigger funds, which would have such third-party distribution relationships already in place.

In addition, the consultation also aims at seeking feedback on the possibility to provide as part of the notification also information on minimum and maximum capital raising targets, expected duration of marketing, and revenues treatment. One thing to bear in mind is that there are no longer domiciles across Europe where supervisory fees for crossborder marketing are linked or tiered on the basis of the amounts raised. We find that, whilst this information might be useful, the reason why it would be requested it is not immediately apparent.


The increasing attention on crossborder distribution matters is welcome, yet it seems to diverge sometimes from the overall aims underpinning the Capital Markets Union. What seems to be certain though, is that going forward managers and promoters will have to give extra thought to how they plan the crossborder marketing of their UCITs and AIFs.

Inputs on the consultation can be provided at this link.

Get in touch here with your contacts at Veneziano & Partners to see how we can help with UCITS crossborder marketing notification.

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