6 regulatory changes impacting cross-border marketing in Europe

France: AMF recommendation on distribution of actively managed certificates (AMCs)

The AMF has published some recommendations and reminders to improve investor protection when AMCs are distributed to retail clients. These are the key recommendations:

• When making a target market assessment, restricting the “positive” target market to only those clients with the highest level of knowledge and experience;
• Information on costs should be provided at least quarterly, with the AMF specifying the type of information which should be provided; and
• The persons determining the composition of the underlying (index or basket) should have the necessary authorisations to provide collective investment or portfolio management activities on behalf of 3^rd parties.

The paper also includes a reminder to comply with the suitability and appropriateness regime, direct marketing regime and public offer regime.

EU: amendments to prospectus exemptions and equivalence regime

An Amendment Regulation has been published which effects the following:

• Key changes made to equivalence regime for prospectuses approved in accordance with the laws of a third country to make it more workable and facilitate access of third country issues to EU public markets.
• Prospectuses should now be delivered to potential investors in electronic format, upon request and free of charge (and no longer in paper format).
• Amendment to the Value of Offering Exemption to increase the threshold to 12 milllion such that offers that have a total consideration in the EU below EUR 12m per issuer or offeror calculated over a 12-month period are exempt from the Prospectus requirement. Member States will continue to be able to set a lower threshold and exempt offers that have a total consideration in the EU below EUR 5m. This applies from 5 June 2026.

France: AMF updates 2020-03 doctrine to reflect compliance with ESMA’s guidelines on the naming of ESG funds

The doctrine was first published in March 2020 to regulate communications on the consideration of non-financial criteria (i.e., ESG) in regulatory and marketing documentation of funds marketed to retail investors.

It has now been amended (effective from 30 December 2024) to take account of ESMA’s guidelines on the naming of ESG funds and also clarifies the interaction of the doctrine with the guidelines i.e. if a fund marketed to the general public in France wishes to include terms related to ESG criteria or sustainability in its name and communicate on this topic in its marketing documentation, it will have to cumulatively comply with the ESMA guidelines and the criteria of the doctrine.

The AMF has also since communicated that the marketing of financial products and financial investment advice will be one of its supervisory priorities for 2025, in particular digital marketing to retail clients, supervision of tied agents and investment advisers, and online offerings of complex/innovative products.

Switzerland: FINMA Circular on FinSA Conduct Rules comes into force

The circular entered into force on 1 January, 2025 and is applicable to financial service providers supervised by FINMA. It is therefore not directly applicable to foreign financial services firms providing cross-border investment services into Switzerland.

However, as the Circular specifies and interprets the FinSA rules of conduct to which foreign financial services firms are generally subject, it is still relevant to such firms.  For firms doing business with Swiss Retail Clients and, with respect to certain rules, Professional Clients, it would be prudent to consider the circular and its explanatory notes carefully. Where a firm only has Swiss Institutional Clients, the rules of conduct do not apply.

Certain provisions have a transitional period of 6 months (i.e. end of June 2025) while others applied immediately.

Liechtenstein: new financial markets laws now in force

Liechtenstein legislation on financial markets laws which is also relevant to the cross-border marketing and selling of investment funds and services has recently been comprehensively revised as of 1 February, 2025 (with changes made to existing laws as well as new laws passed). The main purpose of these changes is to more closely align the basic concepts and terminology to the EEA legal framework from a regulatory perspective. However, the respective ordinances to the revised acts have not yet been published.

One of the key changes is the inclusion of a specific reverse solicitation exemption for investment services based on Article 42 MiFID II although no formal provision has been introduced with respect to banking services (even though the concept has been recognised by the FMA and is included in CRD VI).  It if further expected that the Ordinances will contain special provisions for UK investment firms.

Further analysis is currently being done on the changes by local counsel to assess the impact on cross-border distribution of funds and provision of investment services.

UK: various consultations and announcements regarding cooperation

In the last few months, the UK has announced the following:

• Publication of a consultation paper on the new UK product information framework for consumer composite investments (CCIs), which will replace the PRIIPS regime and the UCITS disclosure requirement (open for comments until 20 March 2025).
• Publication of a consultation paper on the MiFID Organisational Regulation which sets out proposals to transfer the requirements under the regulation into the FCA handbook (open for comments until 20 March 2025). The FCA is proposing to retain the current substance of the requirements, providing continuity for firms, but is asking for feedback on a number of topics including client categorisation and information and disclosure requirements.
• Extension of the transitional arrangements for specified categories of Gibraltar-based firms to provide financial services in the UK and facilitate the access by similar types of UK-based firms to Gibraltar's financial services market. The transitional arrangements have been extended by a further 12 months to 31 December 2025.
• The UK and Chinese intentions to enhance financial regulatory cooperation between the jurisdictions, including through progressing signing memoranda of understanding between the relevant regulatory authorities. It includes discussion of existing UK-China Stock Connect as well as feasibility of UK- China ETF Connect and UK-China Wealth Connect programme and use of master-feeder structures.