Passport and Application To Non-EU Countries

• Main tenet of AIFMD is passport throughout Europe, granted as at today only to fully compliant EU managers and EU AIFs

• AIFMD passport based on the UCITS passport

• Mechanisms for recognition of third countries and application of passport

• ESMA advice based on the assessment of the following:• Investor Protection

• Market Disruption

• Market Competition

• Monitoring of Systemic Risk

• Delegated act of European Commission

AIF Platforms

• Platform solutions became very popular with advent of AIFMD

• Ability to passport if the structure is fully European

• Upsides• Enhanced perception and marketability due to passport

• Shorter time to market than if own fund is built

• Ability for the AIFM platform to delegate to the non-EU manager the management of the portfolio

• Downsides• Cost (fee charged per AUM)

• Loss of independence over the fund

• No goodwill

• Potential remuneration issues to consider for foreign manager

Definition of Marketing

• Marketing means a direct or indirect offering or placement at theinitiative of the AIFM or on behalf of the AIFM of units or shares of anAIF it manages to or with investors domiciled or with a registeredoffice in the Union

• Marketing is not defined at European but at local level

• Professional investors only, but retail may be allowed at local level

• Also through third parties• Third party marketers

• Pension fund consultants

• Cap intro

Pre-Marketing, Soft Marketing

• Regulated at local level with various approaches

• The concept of pre-marketing • Carried out to gauge investor interest

• No final or subscription documents

• No AIF in place or approved

• No name of the AIF

• Inability of investors to commit or subscribe

• It may not amount to marketing but eliminates reverse enquiry

• French examples with thresholds of investor and investment size

Reverse Enquiry

• Initial draft of AIFMD proposed prohibition on reverse enquiry, however incorporated under recital 70 final version AIFMD.

• Regulated at local level, varied approach across Europe.

• Relationship Approach vs. Transaction Approach

• Websites • Password protected• Product by product access• No Performance• Not visible in countries where regime is unfavourable/no language version accordingly

• Newsletters• Only individual funds• Avoid mentioning new or additional funds

• Compliance burden, document the trail and story of each transaction

• Beware of investors or regulators?

Approach Across Europe

Country Pre-Marketing/Soft-

Marketing

Reverse Enquiry

Ireland Currently no distinction

between marketing and pre-

marketing.

Reverse enquiry is contemplated, although it is

envisaged that Central Bank of Ireland will

interpret it strictly and unfavourably. It is advisable

to have at all time evidence of the initiative of the

investor.

Austria Marketing includes pre-

marketing and soft-marketing

provided that sufficient

information is given to investor.

Reverse enquiry is contemplated, subject to it

being genuinely at the request of the prospective

investor and on a specific strategy or fund. Has to

relate to a specific AIF or strategy.

Germany BaFIN takes the view that

marketing occurs if the AIF a) is

established; b) has a name; c)

terms allow for immediate

subscription.

Reverse enquiry is contemplated towards

professional and semi-professional investors and

does not necessarily have to relate to a specific

fund. Each transaction needs to be preceded by a

reverse enquiry.


France Contact made with up to 50

professional or private investors,

whose initial subscription would be

at least Euro 100,000, to assess

interest prior to launch of fund is

not considered marketing, provided

investors are not given any

subscription document or other

documentation containing definitive

information on fund characteristics.

Subsequent subscriptions are

considered marketing.

Reverse enquiry is contemplated

and does not necessarily have to

relate to a specific fund. Each

transaction needs to be preceded

by a reverse enquiry.


United Kingdom All discussions entertained with

investors on the basis of draft

documentation would not amount

to an offer where such documents

cannot be used to make an

investment.


and requires to be substantiated

that a confirmation from investor is

provided to the extent that offer or

placement was made at its

initiative.

The Netherlands Providing fund documents in draft

form or with no option to

subscribe is not considered

marketing.

Reverse enquiry is contemplated,

provided that it is carried out at

the exclusive initiative of the

investor.

Finland Activities which do not include

offering units nor are aimed at

obtaining binding commitments

from investors may not be

considered marketing

In order to enforce reverse enquiry

there should be no discussion on

the actual investment between the

manager and the investor prior to

the approach made by the investor.


Sweden Marketing cannot be construed

unless AIF actually is in existence.

All such activities conducted before

a fund vehicle meets the criteria to

be an AIF should not be considered

as marketing and contact with

investors in these situations as well

Reverse enquiry can be construed

when investor approaches on its

own an AIFM to make a

subscription and the company

website is not directed specifically

to Swedish investors nor contains

specific information about that AIF

Denmark Introductory meetings with

potential investors will not be

considered marketing if i) the fund

is not established; ii) no fund

document has been prepared; iii)

investors cannot make subscription.


under local AIFM law, provided that

the manager can document and

substantiate at all times that it was

the investor to initiate the

commitment to invest in an AIF.

Norway Only invitations to purchase funds

are considered marketing.

Reverse enquiry is allowed, subject

to first approach made by investor.


Luxembourg Pre-marketing activities are

permissible in Luxembourg,

provided that the material used for

these activities i) is in draft form; ii)

cannot be used to subscribe or

commit to an investment; and iii)

also states that the AIF has not

been approved yet, depending on

circumstances.

Reverse enquiry is allowed and

managers have to prove that

investors subscribed at their own

initiative without any direct or

indirect solicitation made by the

manager.

Belgium There is currently no distinction

between marketing and pre-

marketing.

Reverse enquiry contemplated, but

need to be at the exclusive

initiative of the investor.

Private Placement

• The Private Placement is not private anymore

• From safe-harbour rule to process with the regulator

• Article 42 AIFMD – private placement conditions• Transparency requirements

• disclosure to investors

• annual report

• reporting to regulatory authorities –Annex IV

• Cooperation

• Non FATF blacklist

• Option for gold-plating of the conditions above in AIFMD

Gold-Plating across Europe

• Appointment of depositary-lite entity• Austria, Germany, France, Denmark

• Appointment of local agent/representative• Austria, France

• Additional documentation and requirements• Luxembourg – compliance with ESMA guidelines on remuneration

• The Netherlands –AIFM Home State certification of compliance with cooperation agreement

• Denmark – reciprocity statement from AIFM Home State authority that it will allow private placement from Danish AIFs

Veneziano & Partners Limited is registered in England and Wales with number 8416146. The fact that you receive this information does not create nor impose any relationship with Veneziano & Partners Limited. The contents of this document are for

information purpose only and represent a summary of subject matters of interest. While we endeavour to keep the information up to date and correct, we make no representations or warranties, expressed or implied, about the completeness,

accuracy and suitability thereof for any purpose. Any reliance you place on such information is therefore strictly at your own risk. The contents of this document should not be relied upon, treated as or substitute legal advice. Veneziano & Partners

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