UCITS And AIFMD Update: Cross-Border Fund Distribution Proposals

The European Commission is continuing to lay foundations for the development of the Capital Markets Union ("CMU") with the publication of a number of proposals on 12 March 2018. In an investment funds context, this legislative initiative includes measures to reduce current national regulatory barriers which reduce the effectiveness of the UCITS and AIFMD marketing passports due to differing interpretation by EU Member States ("Member States") on how the marketing passports may be exercised.

Background

Noting that the EU investment market is predominantly organised along national lines (with 70% of the total assets under management held by investment funds registered only for distribution in their domestic market and only 37% of UCITS and 3% of AIFs registered for marketing in more than three Member States), the European Commission wants to remove these inefficiencies and reduce the cost of EU cross-border fund distribution. This should enable the EU investment