CSSF FAQ on Cross Border Distribution of Funds: Guidance on Marketing Communications



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 below.

Key takeaways

1. Scope

The CSSF FAQ confirms that the following investment fund managers (IFMs) fall within the scope of Article 4:

  • 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 Law);
  • 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 Law);
  • 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 345/2013;
  • managers of European qualifying social entrepreneurship funds (EuSEF) within the meaning of Regulation (EU) No 346/2013.
  • IFMs acting as distributor or intermediary for funds that they do not manage, in which case the IFM managing the fund shall be responsible for the compliance with Article 4 and ensure that all delegation requirements of CSSF Circular 18/698 are also complied with; and
  • MCs addressed to investors or potential investors which are not resident in the European Economic Area (EEA).

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 committee;
  • 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.

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

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 management.

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 services.