Luxembourg CSSF clarifies marketing and reverse solicitation under AIFMD

On 10 August 2015, the CSSF published an updated version of its Frequently Asked Questions (FAQ) on the AIFM Law of 12 July 2013 (transposing AIFMD in Luxembourg), in relation to activities in Luxembourg needing not be passported or notified, depending on their qualification as marketing or reverse solicitation.

Draft documents and distance marketing

An AIFM providing draft documents to potential investors does not qualify as marketing if such investors cannot use the documents to formally subscribe to the AIF. In such a case, providing such documents prior to informing the CSSF is allowed.

Distance marketing includes any means of communication that does not require the AIF/AIFM and the investor to be physically present in Luxembourg at the same time. It qualifies as marketing when investors are domiciled or have registered offices in Luxembourg and the relevant materials can be used to subscribe for securities in the fund.

Clarification of reverse solicitation

Reverse solicitation, contrary to marketing, is providing information in respect of an AIF and enabling a potential investor to subscribe for the fund's securities (i) on its (or its agent's) own initiative and (ii) without any solicitation by the AIF or AIFM (or its intermediary). The AIFM has the burden of proof (providing written confirmation by the investor of its decision to invest or initially request information on its own initiative).

Lastly, certain activities are excluded from marketing, such as (i) investments in AIFs via a discretionary mandate to manage individual portfolios (instigated by the investment manager), (ii) proposals to invest in an AIF via an investment advisory agreement (instigated by the adviser) or (iii) investments in AIFs via collective portfolio management of an AIF (instigated by such AIF/AIFM or portfolio manager).