French Regulator Clarifies Position With Respect To Marketing Of Alternative Investment Funds In France

On June 30, the French Securities Regulator (the "AMF") issued guidance in the form of Instruction DOC-2014-031 on the procedures for marketing shares and units of alternative investment funds ("AIFs"). In doing so, the AMF brings welcome clarity to the French position with respect to the marketing of AIFs, in particular in the wake of the implementation of the Alternative Investment Fund Managers Directive 2011/61/EU ("AIFMD") into French law.

In publishing this guidance, the AMF sought to issue a consolidated document covering the marketing of various types of funds in various situations. This Commentary will not discuss the marketing of undertakings for collective investment in transferable securities ("UCITS") to all types of investors or AIFs2 based in the European Economic Area ("EEA") to professional clients, as these are largely harmonized processes in Europe, with the French position displaying few peculiarities only. Instead, this Commentary focuses on the marketing of non-EEA AIFs, both to French professional investors and French retail clients.

SCOPE OF AIFs

AIFs (including EEA or non-EEA AIFs) encompass all types of collective investment undertakings that raise capital from a number of investors, with a view to investing the capital in accordance with a defined investment policy for the benefit of those investors.

DEFINITION OF "MARKETING"

"Marketing"—which triggers the filing or authorization requirements set out below—is defined under the AMF guidance as presentation through various means (advertising, solicitation, advice, etc.) with a view to encouraging a client to buy UCITS or AIFs.

Perhaps more importantly, the AMF sets out the following actions that do not qualify as marketing—and hence do not require filing or authorization for the purposes of marketing into France:

Replying to a client's unsolicited request to purchase a specifically identified UCITS or AIF, where allowed by the regulations in force. In this respect, the criterion relating to a "specifically identified UCITS or AIF" would not be fulfilled where an investor requests information about funds performing a given investment strategy (as opposed to a specifically designated fund). If an investor were to request information about a range of funds performing a given investment strategy, the manager would need to conform with the requirements set out below in order to be allowed to market a fund. Purchase or sale of UCITS or AIF made through a discretionary...