GLOBAL REGISTRATION SERVICES Marketing UCITS and AIFs through the European Passports
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MARKETING UCITS AND AIFs THROUGH THE EUROPEAN PASSPORTS Access to the European Economic Area ("EEA")1 is an attractive benefit for EEA Undertakings for Collective Investment in Transferable Securities ("UCITS") or Alternative Investment Funds ("AIFs") under the Alternative Investment Fund Managers Directive ("AIFMD"). Once a UCITS is authorised in an EEA Member State, it may apply to its home National Competent Authority ("NCA") to market in any other EEA Member State ("Member State")1 using the UCITS passport mechanism. For AIFs, an EEA authorised AIFM ("EEA AIFM") which manages an EEA domiciled AIF ("EEA AIF") can apply to market the EEA AIF to "professional investors"2 in any other EEA Member State using the AIFMD passport mechanism.
This Guide covers the passport mechanism across the EEA. While the UK and Switzerland remain key markets for many managers distributing UCITS and AIFs, they are not Member States, which means there is technically no passport mechanism. However, there are recognised and well-established systems for the offering of UCITS or AIFs in both the UK and Switzerland. If you would like details on either of these regimes, please get in touch for further details.
The Maples Group's Global Registration Services ("GRS") team has significant expertise in the global offering of funds (including UCITS and AIFs) and would be happy to assist with any queries you may have.
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EEA includes the 27 EU Member States plus Iceland, Liechtenstein and Norway (note: Switzerland and the UK are not EEA member states). There are some exceptions to this depending on the type of AIF and the intended jurisdiction, please get in touch for further details.
EUROPEAN PASSPORT - UCITS Once a UCITS is authorised in one Member State ("Home Member State"), it can be sold in any other Member State ("Host Member State"), subject to an application to the Home Member State NCA being made under the established UCITS notification procedure.
The core requirements for carrying out the UCITS notification procedure are prescribed under EU law and are therefore largely harmonised in each Member State. The introduction of the Cross Border Distribution of Funds Directive3 ("CBFD") in August 2021 further harmonised the UCITS passport mechanism by requiring the provision of certain facilities in every Member State where a UCITS offers its shares. These facilities do not need to be physically provided in each Member State meaning that such facilities may be provided remotely and in certain cases consolidated by the appointment of a single local agent covering all relevant EEA jurisdictions where the UCITS is approved to market.
Notwithstanding the harmonisation of the EEA UCITS passport, certain Host Member States continue to impose additional requirements such as local publication requirements and / or additional disclosures for local investors. Additionally, certain Host Member States require a local domiciled agent to fulfil duties locally. These local duties are separate to and are in addition to the provision of facilities (with the facilities permitted to be provided remotely). If you would like further information on any additional local requirements in any Host Member State, please get in touch.
3 Directive 2019/1160 of the European Parliament and of the Counsel of 20 June 2019 amending Directives 2009/65/EC and 2011/61/EU with regard to cross-border distribution of collective investment undertakings.
UCITS PASSPORT NOTIFICATION PROCEDURE Note: Central Bank of Ireland ("CBI") filing and / or approval requirements in relation to the Facilities Agent Agreement / Country Supplements and / or local Prospectus etc. Notification to include: 1. Identification of the share class(es) of the sub-fund(s) to be marketed; 2. Latest fund documents must also be made available; 3. Website where home and host NCAs can access fund documents; 4. Classification and name of the entity in charge of marketing in each country;
Informs UCITS
5. Classification, name and contact details of the entity(ies) responsible to provide relevant facilities in respect of the each Member State; 6. Contact details and address for invoicing of the UCITS; 7. Details of the use of any exemptions that are available in a country in relation to marketing arrangements; and 8. Upfront payment of local regulatory levies, where applicable.
Changes to the Notification File One months' prior written notice to the home and / or host NCA regarding: - Marketing of new / additional share class(es) of an already notified sub-fund(s); and - Change of (and / or name of) the Management Company, the UCITS, the Administrator, the sub-fund(s), the share class(es), the facilities agent(s) etc. (includes any change to the name and / or address of the aforementioned).
Timing Once the Passport application has been filed, the Home Member State NCA has up to 10 working days to review the application and transmit it to the Host Member State NCA. Following transmission, the Home Member State NCA immediately notifies the UCITS, whereupon the UCITS may commence marketing in the Host Member State. The Host Member State NCA has 5 working days within which to raise queries regarding the passport application.
EUROPEAN PASSPORT – AIFs An EEA AIF can be marketed to “professional investors” throughout the EEA using the AIFMD passport mechanism after completing the application(s) to the AIFM's Home Member State NCA under the established notification procedure. Similar to the UCITS passport mechanism, the core requirements / procedures for registering an AIF under the AIFMD passport are harmonised throughout the EEA. Facilities Agents must be appointed if the AIF is marketing to retail investors. The AIFMD passport is generally very streamlined and harmonised throughout the EEA however some jurisdictions have additional gold plating in order to maintain the registration of the AIF.
Pre-Marketing CBFD introduced the concept of "pre-marketing" allowing EEA AIFMs4 to test market interest before establishing an AIF or registering an AIF under the AIFMD passport mechanism in an EEA Member State (subject to certain conditions). The Home Member State NCA must be notified within 2 weeks from commencement of pre-marketing activities and most notably, any subscription by professional investors within 18 months of the AIFM (or any delegate) having commenced
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pre-marketing activities is deemed to be as a result of "marketing" and subject to registration of the AIF under the AIFMD passport mechanism. This also means that reliance on reverse solicitation for a period of 18 months after carrying out any pre-marketing activities is effectively ruled out.
Exceptions to AIFMD Passport An AIFM will not be in a position to avail of the AIFMD passport where it wishes to market an EEA feeder AIF whose master is domiciled outside the EEA (or a master AIF domiciled in the EEA which is not managed by an authorised EEA AIFM). In such cases, the AIFM may be in a position to avail of individual Member State national private placement regimes ("NPPRs"). We have extensive experience in the completion of NPPR registrations. For further information, please refer to our Guide to Marketing Alternative Investment Funds to European Investors without an AIFMD Passport.
Certain EEA Member States have opted to apply this to non-EEA AIFMs also. Please get in touch for further details.
AIFMD PASSPORT NOTIFICATION PROCEDURE Note: CBI filing and / or approval requirements in relation the Facilities Agent agreements etc., and, where applicable, any additional information for local investors. Notification to include: 1. AIFMs programme of operations identifying the AIF to be marketed; 2. AIF rules; 3. Identification of the depositary; 4. Description of, or any information on the AIF which is available to investors; 5. Details and an address for invoicing of the AIF; 6. Information on where the master AIF is established if the AIF is a feeder AIF; 7. Any additional information referred to in Article 23(1) for each AIF the AIFM intends to market; 8. Indication of the Member State in which it intends to market the AIF to professional investors or other accepted types of investors dependent on jurisdiction; 9. Information about arrangements for the marketing of the AIF, including where relevant, information on arrangements to prevent the AIF from being marketed to retail investors (if applicable), Including in the case where AIFM relies on activities of independent entities to provide investment services in respect of the AIF; and 10. Upfront payment of local regulatory levies, where applicable. Changes to the Notification File One months’ prior written notice to the home NCA in the event of a material change pursuant to Art. 32(7) of AIFMD.
Timing The Home Member State NCA of the AIFM has up to 20 working days to review and transmit the documentation to the Host Member State NCA. The AIFM will then be informed by the Home Member State NCA that marketing of the AIF may commence.
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PASSPORT MAINTENANCE Once marketing approval is received, the UCITS and / or AIFM must undertake ongoing filing and reporting obligations in order to maintain their relevant passport. In the case of UCITS, this involves providing written notification to Home Member State and each Host Member State NCA where the UCITS is permitted to market (and in some cases, publication in a local newspaper / durable medium).
Additional ongoing filings may include the following:5 •
Changes to the information communicated under the notification procedure, e.g. marketing new / additional share class(es); cessation / withdrawal of marketing, change of service provider(s) (management company / AIFM, depositary, administrator, distributor etc.), change of registered office (of UCITS, management company, AIFM, AIF etc.), change in the entities who will be responsible for marketing in the jurisdiction in question;
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Revisions to fund documentation e.g. material revisions to the programme of activity / operations, constitutive document of the UCITS / AIF, prospectus, supplement, KID, KIID publication of (semi-) annual financial reports;
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Notices to investors, particularly those relating to change of investment terms (e.g. change in investment objective and / or investment policy / strategy, changes to fees etc.); and
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In relation to AIFs, AIFMs are required to carry out so-called 'Annex IV Reporting' in respect of each EEA AIF which it manages.
For UCITS, since the introduction of CBFD certain changes require that a minimum of one months' prior written notice must be given to both the Home Member State NCA and the Host Member State NCA before implementing the change, some of which are highlighted below. For both UCITS and AIFs, the CBFD also introduced new requirements around the processes relating to de-registering share classes and sub-funds in EEA Member States. For further details, please see our client update EU Cross-Border Fund Distribution Rules – Are You Ready? As regards AIFs, a single written notification is made to the Home Member State NCA of the AIFM who in turn communicates the change(s) to the Host Member State NCAs (and in the case of de-registration or cessation and withdrawal of marketing, also to the European Securities and Markets Authority ("ESMA").
There are similar ongoing reporting obligations for non-EEA AIFMs who access the market through NPPRs. However, as non-EEA AIFMs do not have a home NCA, notifications are sent to the host NCA of each jurisdiction where the AIF is marketed.
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This is a non-exhaustive list and since the introduction of CBDF, one months' prior written notice may be required in certain instances.
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TAX AND REGULATORY While entirely unrelated to the UCITS and AIFMD passports, one further important consideration is whether tax reporting will be undertaken in each particular jurisdiction, thereby facilitating a more preferential tax treatment for local investors. We recommend that you discuss this with the fund auditors / administrators with a view to optimising tax treatment in each jurisdiction.
OFFERING UCITS / AIFs OUTSIDE THE EEA The procedure for offering UCITS / AIFs outside the EEA is country-specific and would need to be considered on a country by country basis. Irish and Luxembourg funds are widely distributed in over 90 jurisdictions globally. In an environment where asset managers look toward new markets in an effort to raise capital, we understand the importance of providing global coverage in the delivery of our services. The Maples Group's GRS team has established excellent relationships with a global network of experts and has experience in advising on market entry requirements in those key jurisdictions where funds are distributed. For further information, please refer to our Guide to Marketing Alternative Investment Funds to European Investors without an AIFMD Passport.
KEY COMPONENTS OF OUR GRS OFFERING Initial Registration
Ongoing Maintenance
Market Intelligence
Ongoing Regulatory Compliance and Filings
• Coverage >80 global locations • >50 Country Guides
• Pre-analysis of market entry requirements and associated costs • Advice on permissibility of pre-marketing activities Market Entry – Private Placements • National Private Placement Regimes, including throughout the EEA under AIFMD (Art. 36 & 42 compliance and filing) • Pre-analysis of the requirements in each target market (i.e. applicable private placement exemption, local entities, specific investor documents, local publications, costs, etc.) >70 global locations Market Entry – EEA Passport / Non-EEA Registration • EEA Passport (UCITS & AIFMD) – covering UCITS domiciled in both Ireland and Luxembourg • Non-EEA registration e.g. registration in Switzerland, Asia and Latin America • Assistance in sourcing local agents, negotiation of contracts, associated filings with Home Member State NCA in accordance with local rules, managing translations etc • Preparation of required local disclosures for local investors and filing with Home Member State NCA, as necessary • Preparation and filing of notification pack with relevant Home Member State NCA • Addressing any follow-up queries received from Home Member State or Host Member State NCA
• Ongoing regulatory compliance and filings with home and host NCAs where UCITS / AIFs are approved / registered to be marketed, including: ‒
Annual KIID filings
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Review and input to semi-annual & annual financial statements and filing with host NCAs
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Analysis of changes to fund documentation to determine the extent of modifications required for local investor disclosures
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All updates undertaken to fund documentation
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Review, input and publication of shareholder notices in accord ance with local rules Translation maintenance
• Preparation of filings to Host Member State NCAs linked to registration of new share class(es) and / or sub-fund(s), as well as liquidation / de-registration of share classes and / or sub-funds including associated review of contracts with local agents and filing with Home Member State NCA in accordance with local rules • Pro-active follow-up / undertaking of deadlines for filings linked to financial statements, KIIDs, annual updates etc • Quarterly compliance reports to board of directors • Ongoing monitoring of regulatory developments effecting cross border distribution of funds (e.g. Quarterly Market update, ad hoc client updates etc) • Market intelligence tracking a number of key trends, including distribution in preceding calendar year (e.g. Annual Trends Publication) • Maples Online Portal
MAPLES GROUP'S GRS EXPERTISE The Maples Group has unrivalled expertise in the structuring, establishment and ongoing operation of Irish funds, as well as the distribution of funds globally. Our GRS team offers cross-border fund registration and ongoing maintenance services to funds domiciled in the British Virgin Islands, the Cayman Islands, Ireland, Jersey and Luxembourg through the EEA passport and / or non-EEA registration / national private placement regimes in over 70 global locations. Our core services include market intelligence, market entry,
i.e. pre-marketing notifications under AIFMD for EEA and non-EEA AIFMs, EEA 'passport' registration, global private placement, local agent selection, managing the translation of fund documents into multiple languages for filing purposes, maintenance of ongoing reporting and filing obligations.
Further information on our services is available at our dedicated Global Registration Services website page.
CONTACTS For more information contact:
Emma Conaty Head of Global Registration Services +353 1 619 2708 emma.conaty@maples.com
The Maples Group is a leading service provider offering clients a comprehensive range of legal services on the laws of the British Virgin Islands, the Cayman Islands, Ireland, Jersey and Luxembourg, and is an independent provider of fiduciary, fund services, regulatory and compliance, and entity formation and management services. The Maples Group distinguishes itself with a client-focused approach, providing solutions tailored to their specific needs. Its global network of lawyers and industry professionals are strategically located in the Americas, Europe, Asia and the Middle East to ensure that clients gain immediate access to expert advice and bespoke support, within convenient time zones.
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