March 28, 2023


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CSSF FAQ On Cross Border Distribution Of Funds: Guidance On Marketing Communications – Fund Management/ REITs

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On 20 September 2022, the Luxembourg Commission de
Surveillance du Secteur Financier
(the CSSF)
published a list of questions and answers (the CSSFFAQ) on the application of article 4
(the Article 4) of Regulation (EU) 2019/1156 of
the European Parliament and of the Council of 20 June 2019 on
facilitating cross-border distribution of collective investment
undertakings (the CBDF Regulation), applicable
since 2 August 2021, and the underlying guidelines of ESMA on
marketing communication published on 2 August 2021 (the ESMA Guidelines), which have been
implemented by the CSSF through Circular 22/795 and are applicable since 2
February 2022.

Under Article 4, alternative investment fund managers
(AIFMS), EuVECA managers, EuSEF managers and UCITS
management companies shall inter alia ensure that all
marketing communications (MCs) addressed to
investors are identifiable as such and describe the risks and
rewards of purchasing units or shares of an AIF or units of a UCITS
in an equally prominent manner, and that all information included
in MCs is fair, clear and not misleading, and does not contradict
information provided elsewhere to investors (e.g. prospectus, key
investor information or disclosures required under article 23 of
Directive 2011/61/EU, as applicable).

The aim of the CSSF FAQ is to provide further guidance and
clarifications in respect to Article 4, which are detailed

Key takeaways

1. Scope

The CSSF FAQ confirms that the following investment fund
managers (IFMs) fall within the scope of Article

  • management companies incorporated under Luxembourg law and
    subject to Chapter 15 of the Law of 17 December 2010 relating to
    undertakings for collective investment (the 2010

  • management companies incorporated under Luxembourg law and
    subject to Article 125-2 of Chapter 16 of the 2010 Law;

  • investment companies which did not designate a management
    company within the meaning of Article 27 of the 2010 Law;

  • AIFMs authorised under Chapter 2 of the Law of 12 July 2013 on
    alternative investment fund managers (the 2013

  • internally managed alternative investment funds
    (AIFs) within the meaning of point (b) of Article
    4(1) of the 2013 Law;

  • managers of European qualifying venture capital funds
    (EuVECA) within the meaning of Regulation (EU) No

  • managers of European qualifying social entrepreneurship funds
    (EuSEF) within the meaning of Regulation (EU) No

    Moreover, it confirms that Article 4 applies to all types of funds,
    whether regulated or unregulated, irrespective of its nationality
    and whether it is solely distributed in its home country or (also)
    on a cross-border basis. The term “investors and potential
    investors” shall also be broadly interpreted, coving both
    existing and prospective investors in a (sub-)fund.

    Furthermore, the CSSF reminds that IFMs shall assess, based on
    Article 4 and the list of examples provided in the ESMA Guidelines,
    whether a document or advertising should qualify as MC.

    The CSSF finally clarified that article 4 of the CBDF Regulation
    shall not apply to:

2. Governance and organisation of the IFM

The IFM shall adopt measures allowing the identification of MCs
and shall, through its senior management and/or its internal
control functions, be involved in the process of preparation and
validation of MCs. Such involvement concretely means that:

  • review and sign-off processes based on a four-eyes principle
    are in place and applied as part of the IFM’s oversight;

  • procedures and arrangements ensuring compliance of MCs with
    Article 4 are implemented by the IFM’s executive

  • compliance with Article 4 is included in the IFM’s
    compliance officer’s report required under point 260 of CSSF
    Circular 18/698; and

  • the information presented in the MCs is consistent with the
    legal and regulatory documents of the promoted fund, in line with
    Article 4 and points 18 to 21 of the ESMA Guidelines.

    A risk-based approach, approved by the senior management of the
    IFM, may be introduced as part of the validation process of MCs and
    the use of committees at group level can also be envisaged.

    The CSSF also sustains that the use of a robust automated system
    and/or relevant tools (e.g. data rooms, CRM tools) may serve as
    useful support.

    In terms of delegation, the IFM must perform an adequate oversight
    of the delegate(s) to which some or all task related to the
    preparation of MCs are being delegated.

    The IFM shall also amend its marketing procedure, as referred to
    under point 520 of Circular 18/678, to include, inter
    , the identification process of a document as an MC and
    process for ensuring compliance with Article 4.

    The CSSF finally confirms that any non-compliance with the
    requirements of Article 4 or the ESMA Guidelines shall be
    considered as a breach (e.g. mistakenly promoting a high return or
    not including a proper disclaimer that a communication is an MC
    according to the CBDF Regulation).

3. Information on MCs to be provided by IFMs to the

There is no periodic reporting to the CSSF, but the IFMs shall
provide upon request the following information in relation to the
fund(s) they have under management:

  • the type(s) of MC(s) used;

  • the EEA country(ies) of dissemination of the MC(s); and

  • the targeted investors.

IFMs shall be able to link this information to the relevant
(sub-)fund(s) and identify which information relates to ESG and the
application of article 13 of Regulation (EU) 2019/2088
(SFDR) and the ESMA supervisory briefing on
sustainability risks and disclosures in the area of investment

Moreover, IFMs may be required by the CSSF to provide a copy or
reproduction of any MC without delay.

The CSSF finally confirmed that IFMs with a MiFID top-up license
shall equally provide upon request all the above-mentioned
information with respect to funds for which they perform
discretionary portfolio management and investment advice

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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