EU Proposals to Harmonize Cross-border Fund Distribution and Regulate “Pre-marketing”

The European Commission has published legislative proposals for a Regulation and a Directive amending the current regulatory frameworks for cross-border distribution of funds within the European Economic Area (“EEA”).

While the proposals are in principle designed to ensure a level playing field among different categories of funds, and to facilitate the cross-border distribution of funds, they have the potential to create the opposite effect for non-EEA funds and fund managers by limiting the scope of permitted “pre-marketing” to EEA investors.