12.7.2019 EN Official Journal of the European Union L 188/55 REGULATION (EU) 2019/1156 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings and amending Regulations (EU) No 345/2013, (EU) No 346/2013 and (EU) No 1286/2014 (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Economic and Social Committee (1), Acting in accordance with the ordinary legislative procedure (2), Whereas: (1) Divergent regulatory and supervisory approaches concerning the cross-border distribution of alternative investment funds (AIFs) as defined in Directive 2011/61/EU of the European Parliament and of the Council (3), including European venture capital funds (EuVECA) as defined in Regulation (EU) No 345/2013 of the European Parliament and of the Council (4), European social entrepreneurship funds (EuSEF) as defined in Regulation (EU) No 346/2013 of the European Parliament and of the Council (5), and European Long-Term Investment Funds (ELTIF) as defined in Regulation (EU) 2015/760 of the European Parliament and of the Council (6), as well as undertakings for collective investment in transferable securities (UCITS) within the meaning of Directive 2009/65/EC of the European Parliament and of the Council (7), result in fragmentation and barriers to cross-border marketing and access of AIFs and UCITS, which in turn could prevent them from being marketed in other Member States. A UCITS might be externally or internally managed, depending on its legal form. Any provisions of this Regulation relating to UCITS management companies should apply both to companies, the regular business of which is the management of UCITS and to any UCITS which has not designated a UCITS management company. (2) In order to enhance the regulatory framework applicable to collective investment undertakings and to better protect investors, marketing communications addressed to investors in AIFs and UCITS should be identifiable as such, and should describe the risks and rewards of purchasing units or shares of an AIF or UCITS in an equally prominent manner. In addition, all information included in marketing communications addressed to investors should be presented in a manner that is fair, clear and not misleading. To safeguard investor protection and secure a level playing field between AIFs and UCITS, the standards for marketing communications should apply to marketing communications of AIFs and UCITS. (3) Marketing communications addressed to investors in AIFs and UCITS should specify where, how and in which language investors can obtain summarised information on investor rights and they should clearly state that the AIFM, the EuVECA manager, the EuSEF manager or the UCITS management company (together, ‘managers of collective investment undertakings’), has the right to terminate the arrangements made for marketing. (4) In order to increase transparency and investor protection and facilitate access to information on national laws and regulations and administrative provisions applicable to marketing communications, competent authorities should publish such texts on their websites in, as a minimum, a language customary in the sphere of international finance, including their non-official summaries which would allow managers of collective investment undertakings to get a broad overview of those laws, regulations and administrative provisions. The publication should only be for information purposes and should not create legal obligations. For the same reasons, the European Supervisory Authority (European Securities and Markets Authority) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (8) (ESMA) should create a central database containing summaries of national requirements for marketing communications and hyperlinks to the information published on the websites of competent authorities. (5) In order to promote good practices of investor protection which are enshrined in the national requirements for fair and clear marketing communications, including on-line aspects of such marketing communications, ESMA should issue guidelines on the application of those requirements for marketing communications. (6) Competent authorities should be able to require prior notification of marketing communications for the purpose of ex-ante verification of compliance of those communications with this Regulation and other applicable requirements, such as whether the marketing communications are identifiable as such, whether they describe the risks and rewards of purchasing units of a UCITS and, where a Member State allows marketing of AIFs to retail investors, the risks and rewards of purchasing units or shares of an AIF in an equally prominent manner and whether all information in the marketing communications is presented in a manner that is fair, clear and not misleading. That verification should be performed within a limited timeframe. Where competent authorities require prior notification, this should not prevent them from verifying marketing communications ex-post. (7) Competent authorities should report to ESMA the results of those verifications, requests for amendments and any sanctions imposed on managers of collective investment undertakings. With a view to increasing awareness and transparency on the rules applicable to marketing communications, on the one hand, and ensuring investor protection, on the other hand, ESMA should every second year prepare and send to the European Parliament, the Council and the Commission a report on those rules and their practical application on the basis of ex-ante and ex-post verifications of marketing communications by competent authorities. (8) To ensure equal treatment of managers of collective investment undertakings and to facilitate their decision-making regarding whether to engage in cross-border distribution of investment funds, it is important that fees and charges levied by competent authorities for supervision of cross-border activities are proportionate to the supervisory tasks carried out and publicly disclosed, and that, in order to enhance transparency, those fees and charges are published on the websites of the competent authorities. For the same reason, hyperlinks to the information published on the websites of competent authorities in relation to the fees and charges should be published on the ESMA website in order to have a central point for information. The ESMA website should also include an interactive tool enabling indicative calculations of those fees and charges levied by competent authorities. (9) To ensure better recovery of fees or charges and to increase the transparency and clarity of the fees and charges structure, where such fees or charges are levied by the competent authorities, managers of collective investment undertakings should receive an invoice, an individual payment statement or a payment instruction clearly setting out the amount of fees or charges due and the means of payment. (10) Since ESMA, in accordance with Regulation (EU) No 1095/2010, should monitor and assess market developments in the area of its competence, it is appropriate and necessary to enhance the knowledge of ESMA by enlarging ESMA's currently existing databases to include a central database listing all AIFs and UCITS that are marketed cross-border, the managers of those collective investment undertakings and the Member States in which the marketing takes place. For that purpose, and in order to enable ESMA to maintain the central database up-to-date, competent authorities should transmit to ESMA information on the notifications and notification letters and information that they have received under Directives 2009/65/EC and 2011/61/EU in relation to cross-border marketing activity as well as information about any changes which should be reflected in that database. In that respect, ESMA should establish a notification portal into which competent authorities should upload all documents regarding the cross-border distribution of UCITS and AIFs. (11) In order to ensure a level playing field between qualifying venture capital funds as defined in Regulation (EU) No 345/2013, or qualifying social entrepreneurship funds as defined in Regulation (EU) No 346/2013, on the one hand, and other AIFs, on the other hand, it is necessary to include in those Regulations rules on pre-marketing that are identical to the rules laid down in Directive 2011/61/EU on pre-marketing. Such rules should enable managers registered in accordance with those Regulations to target investors by testing their appetite for upcoming investment opportunities or strategies through qualifying venture capital funds and qualifying social entrepreneurship funds. (12) In accordance with Regulation (EU) No 1286/2014 of the European Parliament and of the Council (9), certain companies and persons referred to in Article 32 of that Regulation are exempt from the obligations under that Regulation until 31 December 2019. That Regulation also provides that the Commission is to review it by 31 December 2018, in order to assess, inter alia, whether that transitional exemption should be prolonged, or whether, following the identification of any necessary adjustments, the provisions on key investor information in Directive 2009/65/EC should be replaced by or considered equivalent to the key information document as laid down in that Regulation. (13) In order to allow the Commission to conduct the review in accordance with Regulation (EU) No 1286/2014 as originally provided for, the deadline for that review should be extended by 12 months. The competent committee of the European Parliament should support the Commission's review process by organising a hearing on the topic with relevant stakeholders representing industry and consumer interests. (14) In order to avoid investors receiving two different pre-disclosure documents, namely a key investor information document (KIID) as required by Directive 2009/65/EC and a key information document (KID) as required by Regulation (EU) No 1286/2014, for the same collective investment undertaking while the legislative acts resulting from the Commission's review in accordance with that Regulation are being adopted and implemented, the transitional exemption from the obligations under that Regulation should be prolonged by 24 months. Without prejudice to that prolongation, all institutions and supervisory authorities involved should endeavour to act as fast as possible to facilitate the termination of that transitional exemption. (15) The Commission should be empowered to adopt implementing technical standards, developed by ESMA, with regard to the standard forms, templates and procedures for publication and notification by competent authorities of the national laws, regulations and administrative provisions and their summaries on marketing requirements applicable in their territories, the levels of fees or charges levied by them for cross-border activities, and, where applicable, relevant calculation methodologies. Furthermore, to improve the transmission to ESMA, implementing technical standards should also be adopted with respect to notifications, notification letters and information on cross-border marketing activities that are required by Directives 2009/65/EC and 2011/61/EU and the technical arrangements necessary for the functioning of the notification portal to be established by ESMA. The Commission should adopt those implementing technical standards by means of implementing acts pursuant to Article 291 of the Treaty on the Functioning of the European Union (TFEU) and in accordance with Article 15 of Regulation (EU) No 1095/2010. (16) It is necessary to specify the information to be communicated every quarter to ESMA, in order to keep the databases of all collective investment undertakings and their managers up to date. (17) Any processing of personal data carried out within the framework of this Regulation, such as the exchange or transmission of personal data by the competent authorities, should be undertaken in accordance with Regulation (EU) 2016/679 of the European Parliament and of the Council (10), and any exchange or transmission of information by ESMA should be undertaken in accordance with Regulation (EU) 2018/1725 of the European Parliament and of the Council (11). (18) In order to enable the competent authorities to exercise the functions attributed to them in this Regulation, Member States should ensure that those authorities have all the necessary supervisory and investigative powers. (19) By 2 August 2024, the Commission should conduct an evaluation of the application of this Regulation. The evaluation should take account of market developments and assess whether the measures introduced have improved the cross-border distribution of collective investment undertakings. (20) By 2 August 2021 the Commission should publish a report on reverse solicitation and demand on the own initiative of an investor, specifying the extent of that form of subscription to funds, its geographical distribution including in third countries, and its impact on the passporting regime. (21) In order to ensure legal certainty, it is necessary to synchronise the application dates of national laws, regulations and administrative provisions implementing Directive (EU) 2019/1160 of the European Parliament and of the Council (12) and of this Regulation with regard to provisions on marketing communications and pre-marketing. (22) Since the objective of this Regulation, namely to enhance market efficiency while establishing the capital markets union, cannot be sufficiently achieved by the Member States but can rather, by reason of its effects, be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective, HAVE ADOPTED THIS REGULATION: Article 1 Subject matter This Regulation establishes uniform rules on the publication of national provisions concerning marketing requirements for collective investment undertakings and on marketing communications addressed to investors, as well as common principles concerning fees and charges levied on managers of collective investment undertakings in relation to their cross-border activities. It also provides for the establishment of a central database on the cross-border marketing of collective investment undertakings. Article 2 Scope This Regulation shall apply to: (a) alternative investment fund managers; (b) UCITS management companies, including any UCITS which has not designated a UCITS management company; (c) EuVECA managers; and (d) EuSEF managers. Article 3 Definitions For the purposes of this Regulation, the following definitions apply: (a) ‘alternative investment funds’ or ‘AIFs’ means AIFs as defined in point (a) of Article 4(1) of Directive 2011/61/EU, and include EuVECA, EuSEF and ELTIF; (b) ‘alternative investment fund managers’ or ‘AIFMs’ means AIFMs as defined in point (b) of Article 4(1) of Directive 2011/61/EU and authorised in accordance with Article 6 of that Directive; (c) ‘EuVECA manager’ means a manager of a qualifying venture capital fund as defined in point (c) of the first paragraph of Article 3 of Regulation (EU) No 345/2013 and registered in accordance with Article 14 of that Regulation; (d) ‘EuSEF manager’ means a manager of a qualifying social entrepreneurship fund as defined in point (c) of Article 3(1) of Regulation (EU) No 346/2013 and registered in accordance with Article 15 of that Regulation; (e) ‘competent authorities’ means competent authorities as defined in point (h) of Article 2(1) of Directive 2009/65/EC or in point (f) of Article 4(1) of Directive 2011/61/EU or competent authorities of the EU AIF as defined in point (h) of Article 4(1) of Directive 2011/61/EU; (f) ‘home Member State’ means the Member State in which the AIFM, the EuVECA manager, the EuSEF manager or the UCITS management company has its registered office; (g) ‘UCITS’ means a UCITS authorised in accordance with Article 5 of Directive 2009/65/EC; (h) ‘UCITS management company’ means a management company as defined in point (b) of Article 2(1) of Directive 2009/65/EC. Article 4 Requirements for marketing communications 1. AIFMs, EuVECA managers, EuSEF managers and UCITS management companies shall ensure that all marketing communications addressed to investors are identifiable as such and describe the risks and rewards of purchasing units or shares of an AIF or units of a UCITS in an equally prominent manner, and that all information included in marketing communications is fair, clear and not misleading. 2. UCITS management companies shall ensure that marketing communications that contain specific information about a UCITS do not contradict or diminish the significance of the information contained in the prospectus referred to in Article 68 of Directive 2009/65/EC or the key investor information referred to in Article 78 of that Directive. UCITS management companies shall ensure that all marketing communications indicate that a prospectus exists and that the key investor information is available. Such marketing communications shall specify where, how and in which language investors or potential investors can obtain the prospectus and the key investor information and shall provide hyperlinks to or website addresses for those documents. 3. Marketing communications referred to in paragraph 2 shall specify where, how and in which language investors or potential investors can obtain a summary of investor rights and shall provide a hyperlink to such a summary, which shall include, as appropriate, information on access to collective redress mechanisms at Union and national level in the event of litigation. Such marketing communications shall also contain clear information that the manager or management company referred to in paragraph 1 of this Article may decide to terminate the arrangements made for the marketing of its collective investment undertakings in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU. 4. AIFMs, EuVECA managers and EuSEF managers shall ensure that marketing communications comprising an invitation to purchase units or shares of an AIF that contain specific information about an AIF do not contradict the information which is to be disclosed to the investors in accordance with Article 23 of Directive 2011/61/EU, with Article 13 of Regulation (EU) No 345/2013 or with Article 14 of Regulation (EU) No 346/2013, or diminish its significance. 5. Paragraph 2 of this Article shall apply mutatis mutandis to AIFs which publish a prospectus in accordance with Regulation (EU) 2017/1129 of the European Parliament and of the Council (13), or in accordance with national law, or apply rules on the format and content of the key investor information referred to in Article 78 of Directive 2009/65/EC. 6. By 2 August 2021, ESMA shall issue guidelines, and thereafter update those guidelines periodically, on the application of the requirements for marketing communications referred to in paragraph 1, taking into account on-line aspects of such marketing communications. Article 5 Publication of national provisions concerning marketing requirements 1. Competent authorities shall publish and maintain on their websites up-to-date and complete information on the applicable national laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS, and the summaries thereof, in, as a minimum, a language customary in the sphere of international finance. 2. Competent authorities shall notify to ESMA the hyperlinks to the websites of competent authorities where the information referred to in paragraph 1 is published. Competent authorities shall notify ESMA of any change in the information provided under the first subparagraph of this paragraph without undue delay. 3. ESMA shall develop draft implementing technical standards to determine standard forms, templates and procedures for the publications and notifications under this Article. ESMA shall submit those draft implementing standards to the Commission by 2 February 2021. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010. Article 6 ESMA central database on national provisions concerning marketing requirements By 2 February 2022, ESMA shall publish and maintain on its website a central database containing the summaries referred to in Article 5(1), and the hyperlinks to the websites of competent authorities referred to in Article 5(2). Article 7 Ex-ante verification of marketing communications 1. For the sole purpose of verifying compliance with this Regulation and with national provisions concerning marketing requirements, competent authorities may require prior notification of marketing communications which UCITS management companies intend to use directly or indirectly in their dealings with investors. The requirement for prior notification referred to in the first subparagraph shall not constitute a prior condition for the marketing of units of UCITS and shall not be part of the notification procedure referred to in Article 93 of Directive 2009/65/EC. Where competent authorities require prior notification as referred to in the first subparagraph, they shall, within 10 working days of receipt of marketing communications, inform the UCITS management company of any request to amend its marketing communications. The prior notification referred to in the first subparagraph may be required on a systematic basis or in accordance with any other verification practices and shall be without prejudice to any supervisory powers to verify marketing communications ex-post. 2. Competent authorities that require prior notification of marketing communications shall establish, apply, and publish on their websites, procedures for such prior notification. The internal rules and procedures shall ensure transparent and non-discriminatory treatment of all UCITS, regardless of the Member States in which the UCITS are authorised. 3. Where AIFMs, EuVECA managers or EuSEF managers market units or shares of their AIFs to retail investors, paragraphs 1 and 2 shall apply mutatis mutandis to those AIFMs, EuVECA managers or EuSEF managers. Article 8 ESMA report on marketing communications 1. By 31 March 2021 and every second year thereafter, competent authorities shall report the following information to ESMA: (a) the number of requests for amendments of marketing communications made on the basis of ex-ante verification, where applicable; (b) the number of requests for amendments and decisions taken on the basis of ex-post verifications, clearly distinguishing the most frequent breaches, including a description and the nature of those breaches; (c) a description of the most frequent breaches of the requirements referred to in Article 4; and (d) one example of each of the breaches referred to in points (b) and (c). 2. By 30 June 2021 and every second year thereafter, ESMA shall submit a report to the European Parliament, the Council and the Commission which presents an overview of marketing requirements referred to in Article 5(1) in all Member States and contains an analysis of the effects of national laws, regulations and administrative provisions governing marketing communications based also on the information received in accordance with paragraph 1 of this Article. Article 9 Common principles concerning fees or charges 1. Where fees or charges are levied by competent authorities for carrying out their duties in relation to the cross-border activities of AIFMs, EuVECA managers, EuSEF managers and UCITS management companies, such fees or charges shall be consistent with the overall cost relating to the performance of the functions of the competent authority. 2. For the fees or charges referred to in paragraph 1 of this Article, competent authorities shall send an invoice, an individual payment statement or a payment instruction, clearly setting out the means of payment and the date when payment is due, to the address referred to in the third subparagraph of Article 93(1) of Directive 2009/65/EC or point (i) of Annex IV of Directive 2011/61/EU. Article 10 Publication of national provisions concerning fees and charges 1. By 2 February 2020, competent authorities shall publish and maintain up-to-date information on their websites listing the fees or charges referred to in Article 9(1), or, where applicable, the calculation methodologies for those fees or charges, in, as a minimum, a language customary in the sphere of international finance. 2. Competent authorities shall notify to ESMA the hyperlinks to the websites of competent authorities where the information referred to in paragraph 1 is published. 3. ESMA shall develop draft implementing technical standards to determine the standard forms, templates and procedures for the publications and notifications under this Article. ESMA shall submit those draft implementing standards to the Commission by 2 February 2021. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010. Article 11 ESMA publication on fees and charges 1. By 2 February 2022, ESMA shall publish on its website hyperlinks to the websites of competent authorities as referred to in Article 10(2). Those hyperlinks shall be kept up to date. 2. By 2 February 2022, ESMA shall develop and make available on its website an interactive tool publicly accessible in, as a minimum, a language customary in the sphere of international finance that provides an indicative calculation of the fees or charges referred to in Article 9(1). That tool shall be kept up to date. Article 12 ESMA central database on cross-border marketing of AIFs and UCITS 1. By 2 February 2022, ESMA shall publish on its website a central database on cross-border marketing of AIFs and UCITS, publicly accessible in a language customary in the sphere of international finance, listing: (a) all AIFs that are marketed in a Member State other than the home Member State, their AIFM, EuSEF manager or EuVECA manager, and the Member States in which they are marketed; and (b) all UCITS that are marketed in a Member State other than the UCITS home Member State as defined in point (e) of Article 2(1) of Directive 2009/65/EC, their UCITS management company and the Member States in which they are marketed. That central database shall be kept up to date. 2. The obligations in this Article and in Article 13 related to the database referred to in paragraph 1 of this Article shall be without prejudice to the obligations related to the list referred to in the second subparagraph of Article 6(1) of Directive 2009/65/EC, to the central public register referred to in the second subparagraph of Article 7(5) of Directive 2011/61/EU, to the central database referred to in Article 17 of Regulation (EU) No 345/2013 and to the central database referred to in Article 18 of Regulation (EU) No 346/2013. Article 13 Standardisation of notifications to ESMA 1. On a quarterly basis, competent authorities of home Member States shall communicate to ESMA the information which is necessary for the creation and maintenance of the central database referred to in Article 12 of this Regulation regarding any notification, notification letter or information referred to in Article 93(1) and Article 93a(2) of Directive 2009/65/EC and in Article 31(2), Article 32(2) and Article 32a(2) of Directive 2011/61/EU, and any changes to that information, if such changes would result in a change to the information in that central database. 2. ESMA shall establish a notification portal into which each competent authority shall upload all documents referred to in paragraph 1. 3. ESMA shall develop draft implementing technical standards to specify the information to be communicated, as well as the forms, templates and procedures for communication of the information by the competent authorities for the purposes of paragraph 1, and the technical arrangements necessary for the functioning of the notification portal referred to in paragraph 2. ESMA shall submit those draft implementing technical standards to the Commission by 2 February 2021. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph of this paragraph in accordance with Article 15 of Regulation (EU) No 1095/2010. Article 14 Powers of competent authorities 1. Competent authorities shall have all supervisory and investigatory powers that are necessary for the exercise of their functions pursuant to this Regulation. 2. The powers conferred on competent authorities pursuant to Directives 2009/65/EC and 2011/61/EU, Regulations (EU) No 345/2013, (EU) No 346/2013 and (EU) 2015/760, including those related to penalties or other measures, shall also be exercised with respect to the managers referred to in Article 4 of this Regulation. Article 15 Amendments to Regulation (EU) No 345/2013 Regulation (EU) No 345/2013 is amended as follows: (1) in Article 3, the following point is added: ‘(o) “pre-marketing” means provision of information or communication, direct or indirect, on investment strategies or investment ideas by a manager of a qualifying venture capital fund, or on its behalf, to potential investors domiciled or with a registered office in the Union in order to test their interest in a qualifying venture capital fund which is not yet established, or in a qualifying venture capital fund which is established, but not yet notified for marketing in accordance with Article 15, in that Member State where the potential investors are domiciled or have their registered office, and which in each case does not amount to an offer or placement to the potential investor to invest in the units or shares of that qualifying venture capital fund.’; (2) the following Article is inserted: ‘Article 4a 1. A manager of a qualifying venture capital fund may engage in pre-marketing in the Union, except where the information presented to potential investors: (a) is sufficient to allow investors to commit to acquiring units or shares of a particular qualifying venture capital fund; (b) amounts to subscription forms or similar documents whether in a draft or a final form; or (c) amounts to constitutional documents, a prospectus or offering documents of a not-yet-established qualifying venture capital fund in a final form. Where a draft prospectus or offering documents are provided, they shall not contain information sufficient to allow investors to take an investment decision and shall clearly state that: (a) they do not constitute an offer or an invitation to subscribe to units or shares of a qualifying venture capital fund; and (b) the information presented therein should not be relied upon because it is incomplete and may be subject to change. 2. Competent authorities shall not require a manager of a qualifying venture capital fund to notify the competent authorities of the content or of the addressees of pre-marketing, or to fulfil any conditions or requirements other than those set out in this Article, before it engages in pre-marketing. 3. Managers of qualifying venture capital funds shall ensure that investors do not acquire units or shares in a qualifying venture capital fund through pre-marketing and that investors contacted as part of pre-marketing may only acquire units or shares in that qualifying venture capital fund through marketing permitted under Article 15. Any subscription by professional investors, within 18 months of the manager of a qualifying venture capital fund having begun pre-marketing, to units or shares of a qualifying venture capital fund referred to in the information provided in the context of pre-marketing, or of a qualifying venture capital fund established as a result of the pre-marketing, shall be considered to be the result of marketing and shall be subject to the applicable notification procedures referred to in Article 15. 4. Within two weeks of having begun pre-marketing, a manager of a qualifying venture capital fund shall send an informal letter, in paper form or by electronic means, to the competent authorities of its home Member State. That letter shall specify the Member States in which and the periods during which the pre-marketing is taking or has taken place, a brief description of the pre-marketing including information on the investment strategies presented and, where relevant, a list of the qualifying venture capital funds which are or were the subject of pre-marketing. The competent authorities of the home Member State of the manager of a qualifying venture capital fund shall promptly inform the competent authorities of the Member States in which the manager of a qualifying venture capital fund is or was engaged in pre-marketing. The competent authorities of the Member State in which pre-marketing is taking or has taken place may request the competent authorities of the home Member State of the manager of a qualifying venture capital fund to provide further information on the pre-marketing that is taking or has taken place on its territory. 5. A third party shall only engage in pre-marketing on behalf of an authorised manager of qualifying venture capital fund where it is authorised as an investment firm in accordance with Directive 2014/65/EU of the European Parliament and of the Council (*1), as a credit institution in accordance with Directive 2013/36/EU of the European Parliament and of the Council (*2), as a UCITS management company in accordance with Directive 2009/65/EC, as an alternative investment fund manager in accordance with Directive 2011/61/EU, or acts as a tied agent in accordance with Directive 2014/65/EU. Such a third party shall be subject to the conditions set out in this Article. 6. A manager of a qualifying venture capital fund shall ensure that pre-marketing is adequately documented. (*1) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349)." (*2) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).’." Article 16 Amendments to Regulation (EU) No 346/2013 Regulation (EU) No 346/2013 is amended as follows: (1) in Article 3, the following point is added: ‘(o) “pre-marketing” means provision of information or communication, direct or indirect, on investment strategies or investment ideas by a manager of a qualifying social entrepreneurship fund, or on its behalf, to potential investors domiciled or with a registered office in the Union in order to test their interest in a qualifying social entrepreneurship fund which is not yet established, or in a qualifying social entrepreneurship fund which is established, but not yet notified for marketing in accordance with Article 16, in that Member State where the potential investors are domiciled or have their registered office, and which in each case does not amount to an offer or placement to the potential investor to invest in the units or shares of that qualifying social entrepreneurship fund.’; (2) the following Article is inserted: ‘Article 4a 1. A manager of a qualifying social entrepreneurship fund may engage in pre-marketing in the Union, except where the information presented to potential investors: (a) is sufficient to allow investors to commit to acquiring units or shares of a particular qualifying social entrepreneurship fund; (b) amounts to subscription forms or similar documents whether in a draft or a final form; or (c) amounts to constitutional documents, a prospectus or offering documents of a not-yet-established qualifying social entrepreneurship fund in a final form. Where a draft prospectus or offering documents are provided, they shall not contain information sufficient to allow investors to take an investment decision and shall clearly state that: (a) they do not constitute an offer or an invitation to subscribe to units or shares of a qualifying social entrepreneurship fund; and (b) the information presented therein should not be relied upon because it is incomplete and may be subject to change. 2. Competent authorities shall not require a manager of a qualifying social entrepreneurship fund to notify the competent authorities of the content or of the addressees of pre-marketing, or to fulfil any conditions or requirements other than those set out in this Article, before it engages in pre-marketing. 3. Managers of qualifying social entrepreneurship funds shall ensure that investors do not acquire units or shares in a qualifying social entrepreneurship fund through pre-marketing and that investors contacted as part of pre-marketing may only acquire units or shares in that qualifying social entrepreneurship fund through marketing permitted under Article 16. Any subscription by professional investors, within 18 months of the manager of a qualifying social entrepreneurship fund having begun pre-marketing, to units or shares of a qualifying social entrepreneurship fund referred to in the information provided in the context of pre-marketing, or of a qualifying social entrepreneurship fund established as a result of the pre-marketing, shall be considered to be the result of marketing and shall be subject to the applicable notification procedures referred to in Article 16. 4. Within two weeks of having begun pre-marketing, a manager of a qualifying social entrepreneurship fund shall send an informal letter, in paper form or by electronic means, to the competent authorities of its home Member State. That letter shall specify the Member States in which and the periods during which the pre-marketing is taking or has taken place, a brief description of the pre-marketing including information on the investment strategies presented and, where relevant, a list of the qualifying social entrepreneurship funds which are or were the subject of pre-marketing. The competent authorities of the home Member State of the manager of a qualifying social entrepreneurship fund shall promptly inform the competent authorities of the Member States in which the manager of a qualifying social entrepreneurship fund is or was engaged in pre-marketing. The competent authorities of the Member State in which pre-marketing is taking or has taken place may request the competent authorities of the home Member State of the manager of a qualifying social entrepreneurship fund to provide further information on the pre-marketing that is taking or has taken place on its territory. 5. A third party shall only engage in pre-marketing on behalf of an authorised manager of a qualifying social entrepreneurship fund where it is authorised as an investment firm in accordance with Directive 2014/65/EU of the European Parliament and of the Council (*3), as a credit institution in accordance with Directive 2013/36/EU of the European Parliament and of the Council (*4), as a UCITS management company in accordance with Directive 2009/65/EC, as an alternative investment fund manager in accordance with Directive 2011/61/EU, or acts as a tied agent in accordance with Directive 2014/65/EU. Such a third party shall be subject to the conditions set out in this Article. 6. A manager of a qualifying social entrepreneurship fund shall ensure that pre-marketing is adequately documented. (*3) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349)." (*4) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).’." Article 17 Amendments to Regulation (EU) No 1286/2014 Regulation (EU) No 1286/2014 is amended as follows: (1) in Article 32(1), ‘31 December 2019’ is replaced by ‘31 December 2021’; (2) Article 33 is amended as follows: (a) in the first subparagraph of paragraph 1, ‘31 December 2018’ is replaced by ‘31 December 2019’; (b) in the first subparagraph of paragraph 2, ‘31 December 2018’ is replaced by ‘31 December 2019’; (c) in the first subparagraph of paragraph 4, ‘31 December 2018’ is replaced by ‘31 December 2019’. Article 18 Evaluation By 2 August 2024 the Commission shall, on the basis of a public consultation and in light of discussions with ESMA and competent authorities, conduct an evaluation of the application of this Regulation. By 2 August 2021 the Commission shall, on the basis of a consultation of competent authorities, ESMA and other relevant stakeholders, submit a report to the European Parliament and to the Council on reverse solicitation and demand on the own initiative of an investor, specifying the extent of that form of subscription to funds, its geographical distribution, including in third countries, and its impact on the passporting regime. That report shall also examine whether the notification portal established in accordance with Article 13(2) should be developed so that all transfers of documents between competent authorities take place through it. Article 19 Entry into force and application This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from 1 August 2019. However, Article 4(1) to (5), Article 5(1) and (2), Article 15 and Article 16 shall apply from 2 August 2021. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 20 June 2019. For the European Parliament The President A. TAJANI For the Council The President G. CIAMBA (1) OJ C 367, 10.10.2018, p. 50. (2) Position of the European Parliament of 16 April 2019 (not yet published in the Official Journal) and decision of the Council of 14 June 2019. (3) Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1). (4) Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds (OJ L 115, 25.4.2013, p. 1). (5) Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds (OJ L 115, 25.4.2013, p. 18). (6) Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds (OJ L 123, 19.5.2015, p. 98). (7) Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32). (8) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84). (9) Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) (OJ L 352, 9.12.2014, p. 1). (10) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1). (11) Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39). (12) Directive (EU) 2019/1160 of the European Parliament and of the Council of 20 June 2019 amending Directives 2009/65/EC and 2011/61/EU with regard to cross-border distribution of collective investment undertakings (see page 106 of this official journal). (13) Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, p. 12).

Summary: Cross-border distribution of collective investment undertakings Cross-border distribution of collective investment undertakings SUMMARY OF: Regulation (EU) 2019/1156 on facilitating cross-border distribution of collective investment undertakings and amending Regulations (EU) No 345/2013, (EU) No 346/2013 and (EU) No 1286/2014 WHAT IS THE AIM OF THE REGULATION? It sets out uniform rules for national regulation concerning marketing requirements for collective investment undertakings (or ‘investment funds’) and on marketing communications addressed to investors, to improve market efficiency as part of establishing the EU’s capital markets union. It also sets out a common approach to fees and charges levied on investment fund managers for their cross-border activities and proposes a central database on the cross-border marketing of collective investment undertakings. KEY POINTS The regulation applies to: Alternative investment fund (AIF)* managers*; Undertaking for collective investment in transferable securities (UCITS)* management companies, including any UCITS which has not designated a UCITS management company; European venture capital fund (EuVECA)* managers; and European social entrepreneurship fund (EuSEF)* managers. Marketing communications AIFMs, EuVECA, EuSEF and UCITS managers, as well as UCITS management companies, must ensure that all marketing communications addressed to investors are identifiable as such and describe the risks and rewards of purchasing units or shares of an AIF or units of a UCITS in an equally prominent manner. Marketing communications should: be fair, clear and not misleading;indicate that a prospectus exists and that key investor information is available, and specify where, how and in what language investors can obtain the prospectus and key information;specify where, how and in what language investors can obtain a summary of investor rights, which will include, where appropriate, information on access to collective redress mechanisms at EU and national level in the event of litigation;contain clear information indicating that the manager or the management company may decide to stop marketing its investment fund. Competent authorities must keep their websites up to date with complete information on applicable national laws, regulations and administrative rules, including summaries, governing marketing requirements for AIFs and UCITS, in a language customary for international finance. To verify compliance with this regulation and national rules on marketing requirements, competent authorities may require advance notice of marketing communications intended by UCITS management companies to be used directly or indirectly in their dealings with investors. Fees and charges Common principles regarding fees and charges levied by competent authorities on managers of collective investment undertakings for their cross-border activities must be consistent with the overall costs of the competent authority. By 2 February 2022, The European Securities and Markets Authority (ESMA) will make publicly available on its website an interactive tool that provides an indicative calculation of the fees or charges. Central database The regulation also introduces a central database regarding the international marketing of AIFs and UCITS within the EU. ESMA must publish this database on its website by 2 February 2022, in a language customary for international finance. Pre-marketing* The regulation introduces rules on pre-marketing EuVECAs and EuSEFs from 2 August 2021, in line with those laid down for alternative investment funds in Directive (EU) 2019/1160. The rules are aimed at allowing managers to target investors by testing their appetite for upcoming investment opportunities or strategies through qualifying venture capital funds and qualifying social entrepreneurship funds. Reporting Competent authorities must report to ESMA on marketing communications by 31 March 2021 and every 2 years, outlining the number of requests for amendments of marketing communications, clearly distinguishing the most frequent breaches, and giving examples. Evaluation By 2 August 2024, the European Commission through public consultation and discussion with ESMA and competent authorities, will conduct an evaluation of the application of the regulation. FROM WHEN DOES THE REGULATION APPLY? It has applied since 1 August 2019. Article 4(1) to (5) on marketing information, Article 5(1) and (2) on competent authority websites, and Articles 15 and 16 on amendments to previous legislation concerning pre-marketing of EuVECAs and EuSEFs apply from 2 August 2021. BACKGROUND See also: Investment funds (European Commission) UCITS — Undertakings for collective investment in transferable securities (European Commission) The European Securities and Markets Authority (ESMA). KEY TERMS Alternative investment fund (AIF): a collective investment undertaking (investment fund) which raises capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors, and not requiring authorisation under Article 5 of the UCITS Directive 2009/65/EC. They include EuVECA, EuSEF and ELTIF*. Alternative investment fund manager (AIFM): legal person whose regular business is managing one or more AIFs. Undertaking for collective investment in transferable securities (UCITS): an undertaking for collective investment (or ‘investment fund’) which invests in securities, i.e. in stocks, bonds, stocks and bonds, short-term treasury instruments and cash. European venture capital fund (EuVECA): a label introduced in Regulation (EU) No 345/2013 which allows managers to set up and market their funds across the EU using a single set of rules. European social entrepreneurship fund (EuSEF): a label introduced in Regulation (EU) No 346/2013 which is designed to identify funds focusing on European social businesses, making it easier for them to attract investment. Pre-marketing: providing information or communication on investment strategies or investment ideas by a manager of a qualifying venture capital fund to potential investors in the EU in order to test their interest in a qualifying venture capital fund which is not yet established. European long-term investment fund (ELTIF): introduced in Regulation (EU) 2015/760 aimed at investment fund managers who want to provide long-term investment to institutional and private investors across Europe. They target specific types of projects which require long-term funding to develop successfully but struggle to get financing. MAIN DOCUMENT Regulation (EU) 2019/1156 of the European Parliament and of the Council of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings and amending Regulations (EU) No 345/2013, (EU) No 346/2013 and (EU) No 1286/2014 (OJ L 188, 12.7.2019, pp. 55-66) RELATED DOCUMENTS Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Action plan on Building a Capital Markets Union (COM(2015) 468 final, 30.9.2015) Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds (OJ L 123, 19.5.2015, pp. 98-121) Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) (OJ L 352, 9.12.2014, pp. 1-23) Successive amendments to Regulation (EU) No 1286/2014 have been incorporated into the original text. This consolidated version is of documentary value only. Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank: An investment plan for Europe (COM(2014) 903 final, 26.11.2014) Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds (OJ L 115, 25.4.2013, pp. 18-38) See consolidated version. Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds (OJ L 115, 25.4.2013, pp. 1-17) See consolidated version. Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, pp. 1-73) See consolidated version. Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, pp. 84-119) See consolidated version. Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, pp. 32-96) See consolidated version. last update 06.12.2019