Proposed Changes To EU Cross- Border Fund Distribution Rules

Introduction

While cross-border distribution of EU funds has grown, the EU funds' market is still predominantly organised along national lines with 70% of all assets under management held by funds registered for sale only in their domestic market¹ and only 37% of UCITS and about 3% of AIFs registered for sale in more than three EU member states.

The European Commission has identified regulatory barriers as a significant disincentive to EU cross-border distribution. These barriers concern national marketing requirements, regulatory fees, administrative requirements and notification requirements and were identified by the Commission as a result of an in-depth evaluation of the relevant provisions of Directive 2009/65/EC (the "UCITS Directive") and Directive 2011/61/EU (the "AIFM Directive"), the additional requirements imposed by EU member states and the responses to consultations such as the Green Paper on Capital Markets Union,² the Call for Evidence on the EU