AMF introduces new rules on pre-marketing of funds
The French regulator, the Autorité des Marchés Financiers (AMF) has recently published a rule change in relation to the distribution of UCITS and alternative investment funds (AIFs) in France, which indicates a relaxation of the AMF’s existing position.
As part of a process to encourage innovation and make it easier to create new funds in France, on 04 July 2016, the French regulator, the Autorité des Marchés Financiers (AMF) announced an amendment to its Guide to regimes for marketing UCITS and AIFs in France with the introduction of the concept of "pre-marketing".
The amendment arises out of the work of the French Routes and Organisation Garden working group (FROG). The aim of FROG, which was established in February 2016 between the AMF and the Association Française de la Gestion Financière (the French Asset Management Association or AFG), is to “raise the profile and broaden the distribution of French investment funds” and to ”enhance the positioning of French asset management internationally”.
Until now, certain types of presentations or exchanges with investors prior to the launch of a fund may have been seen as ‘marketing’ under French rules. This then triggers the application of rules which the AMF now views as being “poorly suited to this stage of a product’s development”.
The AMF notes that the following situations, for example, would no longer be regarded as triggering the marketing rules:
- where a management company contacts up to a maximum of 50 investors (professionals or individuals whose initial subscription would be at least €100,000) to assess their interest prior to the launch of a UCITS or AIF - this, though, is provided that investors are not given a subscription form and/or documentation containing definitive information on the fund’s characteristics. Any subsequent subscription by the investors contacted will not be considered to be on a reverse solicitation basis
- where a management company takes part in conferences or meetings of professional investors, provided the investors are not asked to invest in a specific product
- OTC trades between investors
- the purchase, sale or subscription of:
- units or shares in a UCITS or an AIF in the context of a management company’s compensation policy, or
- units or shares in a UCITS or an AIF on behalf of the management company’s management team, which manages them, or its senior management, or the management company itself
- where a management company responds to a request for proposal by a professional investor that is a legal entity.
