Although the Cross Border Distribution Framework (CBDF) regime was due to be implemented across the EU on 2nd August 2021, and considered one of the major changes to the marketing of funds in Europe, in reality the Directive has only seen a minority of Member States fully implement the CBDF into their local regulations. Leading countries observed include Belgium, Denmark, France, Germany, Hungary, Ireland, Liechtenstein, Luxembourg and Poland.
Currently, there are regulators that will not be in a position to implement the Directive until later this year, or even into next year, and of those that have met the deadline for implementation none have been able to provide a level of detail that adequately explains all the revised requirements that have been introduced and how they have been introduced to local legislation.
Home and Host Regulators are differing in their approach to the 1-month notice period for the launch of new share classes, with some waiving it completely. There are also differing approaches to when a KIID is required and whether any formal approval will be issued by the Home, or Host, regulators.
The requirements in respect of the provision of the Facility to process the purchase and redemption of shares and to make payments to investors are also differing from jurisdiction to jurisdiction, as is how the information to investors in respect of the facility is provided. Should this information be translated into the Host language, should it be jurisdiction-specific and should it be part of the Prospectus has not been made clear in the Directive and there is no uniformity across regulators in their approach.
To add to the confusion regarding the provision of facilities to investors, third parties who have previously provided paying agent services are withdrawing from the market completely or are interpreting the requirements differently or are only able to offer a subset of the requirements.
Despite the lag in implementation and guidelines lacking clarity, updates are happening on a daily basis. FE fundinfo’s in-house cross-border distribution specialists are taking a very pragmatic approach to the current situation with no clear end date for when the regulations will be implemented in full by all Member States. We are liaising with the regulators and third parties in each of the EU jurisdictions to build a concise picture of the requirements.
To further discuss how our Global Funds Registrations (GFR) team can support asset managers on meeting regulatory requirements for the effective marketing and distribution of funds, contact us here.