European passport

The 2009/65/EC Directive (“UCITS Directive”) and 2011/61/EU Directive (“AIFM Directive” or “AIFMD”) have introduced the following Investment Fund Manager passports:

• Management Company Passport allowing a UCITS management company authorised in a Member State of the European Union (“EU”) / European Economic Area (“EEA”) to pursue in another Member State, the activities for which it has been authorised, either by the establishment of a branch or under the freedom to provide services (FPS). This includes the management of a UCITS established in another Member State (Articles 17 and 18 of the UCITS Directive).
• AIFM Passport allowing any authorised AIFM approved in a Member State of the EU/EEA to manage, either directly (FPS) or via the establishment of a branch, an AIF (regulated or not) established in another Member State and/or to provide in another Member State the services referred to in Article 6(4) of the AIFM Directive for which it has been authorised (Article 33 of the AIFM Directive).

The UCITS Directive and the AIFM Directive establish EU-wide marketing passports that facilitate cross-border distribution of investment funds within the EU/EEA:

• UCITS Passport: Pursuant to Article 93 of the UCITS Directive, a UCITS authorised in a Member State of the EU/EEA may market its units to retail investors in other EU Member States, subject to a notification procedure.
• AIFM Marketing Passport: In accordance with Articles 31 and 32 of the AIFM Directive, an authorised AIFM approved in a Member State of the EU/EEA may market the AIFs it manages – authorised or not – to professional investors across the EU/EEA. This marketing passport is also available for ELTIFs, allowing authorised EU AIFMs to market these funds to professional investors across the EU/EEA. The ELTIF Regulation, however, extends the marketing scope to retail investors, subject to specific investor protection requirements, which are not covered by the AIFMD passport itself.

In addition, the EuVECA Regulation (Article 15) and the EuSEF Regulation (Article 16) establish dedicated passports for the cross-border marketing of EuVECA and EuSEF funds. These passports are available to authorised or registered AIFMs licensed to manage such funds and permit marketing to eligible investors (i.e. professional investors and certain retail investors) across the EU/EEA.

Directive (EU) 2019/1160 on facilitating cross-border distribution of collective investment undertakings complements these frameworks by streamlining the notification procedures under both the UCITS and AIFM Directives. Amongst other changes, it introduces:

• Pre-marketing notifications for AIFs, and
• De-notification procedures in cases of cessation of marketing activities.

These CBDF provisions contribute to greater harmonisation and legal certainty in fund distribution across the EU.

It should be noted that certain marketing activities fall outside the scope of the AIFMD passport regime. These include:

• Marketing of a non-EU AIF to professional investors in the EU by an authorised EU AIFM (Article 36 of the AIFMD),
• Marketing of an AIF to professional investors in the EU by a non-EU AIFM (Article 42 of the AIFMD), and
• The related pre-marketing activities in both cases.

Furthermore, marketing an AIF to retail investors does not fall under the AIFMD passport and is subject to a separate authorisation procedure by the CSSF.