CSSF Guidance On Marketing Communications – Financial Services
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On 12 October 2022, the CSSF updated its FAQ on CBDF Marketing
Communications (“CSSF FAQ“).
The objective of this FAQ is to provide additional guidance to
Luxembourg IFMs on certain key aspects of the marketing
communication (“MC“) requirements under
Article 4 of the CBDF Regulation and ESMA
Guidelines on marketing communications (“ESMA Guidelines“), which
were implemented by the CSSF in its Circular 22/795.
The key points of the CSSF FAQ, as amended in October 2022, are
addressed below:
1. Scope of MC Requirements
In-Scope IFMs:
- All Luxembourg IFMs listed in CSSF Circular 22/795
(“In-Scope IFMs“) must comply with the
MC requirements under Article 4 of the CBDF Regulation and ESMA
Guidelines (“MC Requirements“), which
include e.g., UCITS management companies (“UCITS ManCos”)
and authorised AIFMs. - In-Scope IFMs are subject to MC Requirements in respect of
their collective portfolio management activities. However, IFMs
with a top-up MiFID licence must also be able to provide the CSSF
with certain information on their MC in relation to their
discretionary portfolio management and investment advice
services. - Non-EU AIFMs and sub-threshold AIFMs are not covered by the
scope of MC Requirements pursuant to the CSSF FAQ and CSSF Circular
22/795.
In-Scope funds and investors
- MC in respect of all UCITS and all AIFs managed by In-Scope
IFMs are subject to MC Requirements, regardless of their
regulated/non-regulated funds status, their
Luxembourgish/non-Luxembourgish nationality, or whether they are
managed and/or marketed on a cross-border or national basis only by
In-Scope IFMs. - MC of UCITS/AIFs addressed to existing and/or potential
investors as well as to retail and/or professional investors are in
scope of MC Requirements, but MC addressed to (potential) investors
not located in the EEA are not in scope of MC Requirements.
Distributors
- Distributors/intermediaries, including UCITS ManCos/AIFMs
acting as distributors for UCITS/AIFs that they do not manage (i.e.
delegated UCITS ManCos/AIFMs), are not directly in scope of MC
Requirements under Article 4 of CBDF Regulation, and the CSSF
repeats that it is the responsibility of the In-Scope IFMs managing
the relevant UCITS/AIFs to ensure compliance with these MC
Requirements as well as with the applicable requirements of CSSF Circular 18/698 in
respect of the organisation and delegation of the marketing
function. - The CSSF also refers to ESMA’s Q&A on the application of the
UCITS Directive and its Q&A on the application of the
AIFMD as of 20 July 2022, according to which In-Scope IFMs
will be responsible for ensuring compliance with MC Requirements
“irrespective of who is the actual entity marketing the fund,
and of the relationship it has with the third party distributor
(whether it is contractual or not)”.
2. Governance and organisational requirements of IFMs
MC Identification, Preparation and Validation Process and
Related Procedures
- In-Scope IFMs must define and implement MC identification
measures and procedures allowing them to identify/flag whether or
not a document/communication qualifies as MC as such. - In-Scope IFMs must be involved in the MC preparation and
validation process through their senior management and/or internal
control functions, which will imply the implementation of
appropriate compliance procedures and arrangements for the review
and sign-off of MC in accordance with the four-eye principle, as
further detailed by the CSSF in its FAQ. - In-Scope IFMs are expected to duly document the above processes
of ensuring compliance with MC Requirements, and to update their
marketing procedure to reflect, amongst other things, their MC
identification process.
Delegation and/or support from group/third parties
- Delegation by In-Scope IFMs to group/third parties of some or
all tasks relating to the preparation (not the validation) of MC is
possible, subject to adequate oversight of the delegate(s) and to
appropriate delegation agreement. - In-Scope IFMs may also consider transversal or specific skills
of the group/third parties when preparing and validating MC, and
are not required to replicate tasks already performed by others
(provided that all the conditions pertaining to the In-Scope
IFM’s involvement in the preparation and validation process of
MC are continuously met).
3. Information on MC to be provided to the CSSF
Collection of Information:
- As from 16 September 2022, In-Scope IFMs (as well as Top-up
IFMs in respect of their MiFiD activities) must be able to provide
information to the CSSF upon request with respect to (i) the type
of MC used (e.g., factsheet, brochure, press article, etc.), (ii)
the EEA countries of dissemination and (iii) the targeted investors
(i.e., retail, professional or both). - As from 1 January 20231 , In-Scope IFMs must be
able to link the above information to the relevant UCITS/AIF
managed, and to identify whether the MC entails ESG
information.
Verification of MC
- In-Scope IFMs must be able to provide the CSSF without delay
when requested with a copy/reproduction of any MC linked to a
UCITS/AIF managed and addressed to (potential) investors in the EEA
as well as with any legal and regulatory fund documents (including
for instance the PRIIPs KID). - Any non-compliance with the MC Requirements is considered by
the CSSF to be a breach of Article 4 of the CBDF Regulation, which
may potentially expose In-Scope IFM to sanctions by the CSSF as per
Article 14 of the CBDF Regulation.
Footnote
1. The initial date set by the CSSF was 1 April 2023
but on 12 October 2022, the CSSF modified its FAQ and indicated the
date of 1 January 2023 instead of 1 April 2023.
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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