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Cross-border distribution of investment funds

10/05/2019

On 6 December 2018, the European Parliament's Committee on Economic and Monetary Affairs (ECON) published the final version of draft legislation on cross-border distribution of investment funds. The main changes affecting the UCITS and AIFM Directives are as follows:

  • Pre-commercialisation: Pre-commercialisation of a fund, with the aim of sounding out the reaction of potential investors in a new country prior to launching commercialisation activities, should exclude any selling of shares or units. The manager must equally notify its intent to the member country of origin and the member country where the pre-commercialisation will be conducted.
  • Commercialisation: All information directed at small investors in investment funds must highlight the risks, investors' rights, as well as details on national channels for class action in case of dispute.
  • Ceasing commercialisation: An investment fund should be able to discontinue its activities in a host member country under certain terms and conditions. The fund should offer to redeem all the UCITS units held by investors in the member country and draw investors' attention to the consequences of them keeping their units.
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