AIFMD: “Reverse solicitation”
June 25, 2015 - Regulatory Updates
The reliance upon reverse solicitation has been a grey area for a while now but it would also seem that some US institutional investors are pushing back on reverse solicitation agreements. Many US managers are becoming increasingly interested in AIFMD but there are concerns regarding different approaches taken by European countries on marketing and reporting, especially with Annex IV disclosures (e.g. Remuneration disclosures) varying from country to country. As reported in our previous newsletter, US managers will also be awaiting to see if the passport will be extended to non-EU AIFs or non-EU based AIFMs.
What does this mean for you and what should firms be doing?
Firms who want to promote their products within Europe should be aware of the varying interpretations of what constitutes as marketing by different European countries and regulators. We recommend that fund managers carefully document all interactions with investors, including email and telephone communications, to manage any potential regulatory risk and to seek advice if unsure. The penalty of non-compliance is severe and in some countries constitutes a criminal offence. Investors are also able to claim a right of rescission if a manager had breached AIFMD marketing rules and then lost money. AIFMD is a complex and constantly evolving topic so please contact the team at Lawson Conner for further guidance and help with interpreting marketing across Europe under AIFMD.