{"id":9722,"date":"2022-10-12T15:33:00","date_gmt":"2022-10-12T15:33:00","guid":{"rendered":"https:\/\/iqeq.com\/?p=9722"},"modified":"2023-10-10T10:40:45","modified_gmt":"2023-10-10T10:40:45","slug":"aifmd-ii-is-reverse-solicitation-a-closing-door","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/aifmd-ii-is-reverse-solicitation-a-closing-door\/","title":{"rendered":"AIFMD II: Is reverse solicitation a closing door?"},"content":{"rendered":"
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In November 2021, we wrote an article about the\u00a0implications of CBDF on reverse solicitation<\/a>. With AIFMD II, European regulators seek to crack down further on the use of reverse solicitation to sidestep pre-marketing rules in EU jurisdictions.<\/strong><\/p>\n

The Cross Border Distribution of Funds (CBDF) Directive and Regulation, launched in August 2021, explicitly defines pre-marketing activity for all alternative investment fund managers (AIFMs) marketing funds within the EU. Fund managers traditionally relied on reverse solicitation to market their funds in Europe, but CBDF was an initial step toward regulating pre-marketing contact by increasing the scope of what \u201cpre-marketing\u201d means.<\/p>\n

Further, ESMA guidance applicable to CBDF came into force in February 2022, effectively broadening the definition of marketing while narrowing the definition of reverse solicitation.<\/p>\n

Original Alternative Investment Fund Managers Directive (AIFMD) rules broadened, and the European Commission decided that pre-marketing a fund\u2014even if that fund has not been set up yet\u2014should prevent funds from capitalising on reverse solicitation for a period of 18 months.<\/p>\n

Under the current guidelines for reverse solicitation, investors can access funds they want to invest in without falling within AIFMD marketing requirements\u2014if the investor initiates the approach. But EU regulators aim to crack down on reverse solicitation, suggesting that it\u2019s often used to circumvent AIFMD.<\/p>\n

There is no clear timeline attached to AIFMD II regulation yet, but\u00a0ESMA wrote an opinion piece<\/a>\u00a0on this topic in December 2021, so it\u2019s clearly top of mind. Asked to make suggestions on how to determine how frequent reverse solicitation is, ESMA wrote that \u201cone solution could be the introduction of new reporting requirements.\u201d<\/p>\n

The Commission will most likely act on this idea as part of AIFMD II, but it will probably be a while before any new reporting rules are imposed. And there are lots of logistics to smooth out, particularly for non-EU managers who don\u2019t fall under the purview of the current CBDF or AIFMD regimes.<\/p>\n

We may not see AIFMD II regulation until 2024 or beyond, but change is on its way. If reverse solicitation is a closing door, firms that act now to get ahead of regulatory changes will have an advantage when official regulations are released.<\/p>\n

Have questions about AIFMD II? Please get in touch.<\/strong><\/h4>\n <\/div>\n<\/section>\n\n
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Meet the author<\/h2>\n
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\n \"\" <\/div>\n
\n \"\" <\/div>\n
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Michael Strug<\/h3>\n

Compliance Director, UK<\/p>\n

<\/div>\n

United Kingdom<\/p>\n \n Send email <\/a>\n \n +44203 991 6624 <\/a>\n

\n \n LinkedIn<\/span>\n <\/a>\n <\/div>\n <\/div>\n<\/div> <\/div>\n
\n <\/div>\n <\/div>\n<\/section>","protected":false},"excerpt":{"rendered":"","protected":false},"author":2,"featured_media":7048,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[371],"expertise":[444,17],"service_category":[],"acf":[],"yoast_head":"\nAIFMD II: Is reverse solicitation a closing door? - IQ-EQ<\/title>\n<meta name=\"description\" content=\"is reverse solicitation a closing door? IQ-EQ Compliance Director, Michael Strug, takes a look. find out more here.\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AIFMD II: Is reverse solicitation a closing door? - IQ-EQ\" \/>\n<meta property=\"og:description\" content=\"is reverse solicitation a closing door? 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