As the regulatory landscape continues to evolve, more and more asset managers are using ManCo passporting to market third-party funds, not only for managing funds as a ManCo on a cross-border basis. In principle, you must register individual investment funds for marketing in each jurisdiction. But if you wish to market third-party investment funds that are not managed by you as a Management Company, it is worth it to review whether this activity is covered under an ancillary service of your management company license
The regulatory difficulty is that the UCITS Directive does not include the reception and transmission of orders as a permitted ancillary service – in contrast to AIFMD. But many EU Member States have decided to allow management companies to perform additional ancillary or non-core services, such as (i) investment advice, (ii) reception and transmission of orders, or even explicitly, (iii) the distribution of third-party investment funds. These non-core services might or might not depend on an additional license for the management of portfolios of investments, which needs to be assessed for each individual jurisdiction.
Some EU Member States even interpret the marketing of foreign funds as being part of the UCITS ManCo license itself.
The passporting process and the requirements for the notification to your Home State regulator depends on the chosen mechanism, if it is performed by way of cross-border provision of services or by the establishment of a branch
In summary, you must consider the following points when you intend to passport the marketing of third-party funds to other EU Member States:
If you have any questions or require support, the Zeidler team is here to help. Our global team of professionals remains up to date on the latest legal, regulatory and compliance changes affecting the asset management industry.
