New rules on marketing communications for funds
On 2 Februari 2022 new ESMA Guidelines on marketing communications for funds come into effect. The Guidelines include detailed requirements for fund marketing materials and marketing statements. Fund marketing communications will have to be in compliance with these new rules.
Background: Cross Border Distribution Regulation
The Regulation on cross-border distribution of collective investment undertakings (EU/2019/1156) (CBDR) has delegated the power to adopt certain guidelines on marketing communications to ESMA. The Guidelines were published on 2 August 2021, at the same time the CBDR started to apply.
Application: 2 February 2022
The Guidelines shall apply six months after their publication, so on 2 February 2022. There is no transitional regime and consequently as of 2 February 2022 all marketing communications must comply with the Guidelines. For the Netherlands, the AFM has indicated that it shall monitor compliance. It may be expected that the AFM will do a survey at some point in the forseable future as a first step.
Scope: EU approved managers only
The Guidelines apply to UCITS ManCos, self-managed UCITS, AIFMs, EuVECA managers and EuSEF managers. Although not mentioned by the Guidelines, one may assume that they also apply to ELTIFs, at least by analogy. The Guidelines do not apply to small, sub-threshold AIFMs and do also not apply to non-EU managers, even if they market their funds in the EU using national private placement regimes.
Marketing communications: irrespective of medium applied
According to the Guidelines all messages and materials relating to a particular fund (AIF or UCITS), irrespective of the medium applied, are marketing communications. An exception is made for statutory information such as the prospectus, the KIID/KID, annual reports, company articles and fund terms. Also general corporate communications are excluded, provided there is no reference to a particular fund. Marketing materials may be in any form: in writing or printed form, in electronic format, through press coverage, by interviews, online, by video, radio or live presentations, or on social media. It includes communications addressed to certain investors as well as to the general public. It also includes communications by ManCos and AIFMs as well as by third parties, albeit that the Guidelines only apply to ManCos and AIFMs so they must make sure that third parties acting on their behalf also comply with the Guidelines in their marketing communications.
The Guidelines clarify that communications relating to pre-marketing, are out of scope. This is to draw the line between pre-marketing and marketing which are two different concepts under the cross border distribution regime.
General requirements: no change
The basic marketing requirements remain unchanged. Marketing communications shall be identifiable as such, shall describe risks and rewards and shall be fair, clear and not misleading. This is very much in line with the existing requirements. However, the Guidelines go beyond this and even go beyond the existing marketing requirements for investment firms under MiFID II.
Risks and rewards: stricter rules
Risks and rewards disclosures must be appropriately balanced, both in content and format. While this requirement is not new, the Guidelines stress that font size of risks wording shall be at least equal to the font size of rewards wording. Risks wording in smaller print is no longer allowed. The Guidelines further require that risks shall be positioned in an equally prominent place, for example in a two-column table mentioning risks and rewards. This means that risks mentioned at the end of a document only, are no longer allowed. In addition, at least the risks mentioned in the KIID/KID and the prospectus (!) shall be included. It is unclear how all risks from the prospectus shall be included in marketing communications, especially in short-form communications. Some form of generalisation should still be allowed.
Retail funds: clarification on investment and investment policy
Marketing communications for retail funds that provide characteristics of the fund, must make clear that the investment is related to the fund and not to the underlying assets. In addition, the investment policy must be briefly described. It is not clear what constitutes the ‘charateristics of a fund’. Presumably this relates to the investment strategy or the underlying assets. Where marketing communications are aimed at retail investors in the Netherlands, the Dutch law requirement that communications shall be in Dutch, remains to apply.
Investment policy: active or passive management to be disclosed
If the investment policy is described, marketing communications shall include words like “active” or “actively managed” or “passive” or “passively managed” and “index-tracking” for index-tracking funds. The latter category does not include actively managed index-tracking funds as these are considered to be actively managed. Marketing communications on actively managed index-tracking funds shall also explain the use of the benchmark and the degree of freedom to deviate from the benchmark.
Social media: neutrality of communications
Short marketing communications on social media shall be as neutral as possible and must mention where further information can be found by using a link to the relevant webpage. This triggers the question whether promotional communications on social media are still possible as they normally lack neutrality. Further guidance on this aspect from ESMA would be welcome.
Costs: also information on impact
If costs are mentioned, marketing communications must include information for investors to understand the overall impact on the investment and the overall return of the investment. The mere mentioning of costs such as management fees, is therefore no longer allowed.
Disclaimers: dependant on type and content of communication
The Guidelines recommend, or even require, that specific disclaimers and wording are used in marketing communications. To be identifiable as such, ESMA recommends that marketing communications include the wording “marketing communication”. Marketing communications shall also include a general disclaimer stating:
“This is a marketing communication. Please refer to the [prospectus of the [UCITS/AIF/EuSEF/EuVECA]/information document of the [AIF/EuSEF/EuVECA] and to the [KIID/KID] (delete as applicable) before making any final investment decisions.”
In case of short messages this disclaimer may be replaced by the words “MarketingCommunication” or the hashtag “#MarketingCommunication”. The Guidelines suggest that this long-form or short-form disclaimer is a requirement rather than a recommendation. The disclaimer should be clearly displayed in marketing communications. Parties are free to decide how this is done against the background of the type of communication. The Guidelines however indicate that the end of a video message is not appropriate. The Guidelines are not as strict as, for example, the Dutch rules on risk warnings for certain financial products and services, which must always be displayed in a particular place and must have a particular size.
If past performance is displayed, marketing communications shall include the wording “Past performance does not predict future returns.” If expected future performance is displayed, marketing communications shall include:
“The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and/or current market conditions and are not an exact indicator. What you will get will vary depending on how the market performs and how long you keep the investment/product.”
Future perfomance information shall also be accompanied by a disclaimer indicating that future performance is subject to taxation depending on the personal situation of the investor which may change in the future and that investment may lead to a loss if no capital guarantee is in place.
Action required: check all communications
For parties in scope, action is required as the new regime has now started to apply. New marketing communications must comply with the new rules. Marketing communications made earlier that are still being used, must not be used until revisited to check compliance with the new rules (which is probably not the case as they are unlikely to include the new disclaimers). Going forward, the Guidelines shall be part of a checklist for marketing communications.
Effective 1 January 2022 Legaltree is joined by new partner Taco Wiersma. Taco is specialised in the international trade and transport practice, a specialism that was not offered earlier by Legaltree. Taco focuses on litigation and arbitration in maritime and commercial disputes and on debt collection proceedings against foreign states.
In the opinion of Sander Oorthuys, managing partner at Legaltree, Taco Wiersma’s specialism and the firm’s corporate practice represent a perfect match. ‘In addition, we have a fast-growing arbitration practice, in which a litigator and arbitrator in international trade and transport disputes is more than welcome. As a result of Taco joining Legaltree, we will be able to provide our clients with an even more comprehensive package of services.’
Taco Wiersma: ‘The structure and the innovative approach of Legaltree and the way the firm’s partners connect with each other appeals to me. At Legaltree I can not only assist my clients in my usual personal and efficient manner, but I am also provided with the opportunity to work together better and more efficiently with experienced and equally specialised partners, particularly in the arbitration practice.’
About Taco Wiersma.
Taco has been working as a lawyer since 1989, when he started to work for NautaDutilh. In 1995 he set up his own law firm with a number of other lawyers, where he worked as a managing partner until the beginning of this year.
Taco is regularly instructed by insurance companies, shipping companies, dredging companies, banks, retailers, public authorities, litigation funders and private equity firms. In addition, he regularly acts an arbitrator when resolving international disputes. More information about Taco’s experience can be found on his personal page, Taco Wiersma – Legaltree Advocaten.
Further to the new EU Directive and EU Regulation on cross-border distribution of funds, marketing of funds will be subject to new rules from 2 August 2021. Further important changes will apply as soon as the new ESMA Guidelines become applicable. These new rules will probably have an impact on marketing materials, irrespective of whether they are online, by social media or in hard-copy.
Cross-border fund distribution: new rules
In June 2019, new rules were adopted on the cross-border distribution of collective investment undertakings by means of the Directive on cross-border distribution of collective investment undertakings (2019/1160/EU) (CBDD) and the Regulation on cross-border distribution of collective investment undertakings (EU/2019/1156) (CBDR). Apart from the CBDD and the CBDR, ESMA will issue final guidelines on marketing communications which shall apply from six months following publication. Dutch law will also be amended in line with the CBDD but the bill is still pending.
The new rules amend the existing AIFMD and UCITS regimes with a view to harmonisation of distribution of funds in the EU. As a result, marketing of funds is the central theme of the new rules.
There is some ambiguity about the scope of the new rules. While technically the new rules only apply to licensed AIFMs and UCITS ManCos, the general principle is that EU AIFMs should not be disadvantaged relative to non-EU AIFMs. One cannot therefore exclude that the new rules will also apply to non-EU AIFMs. This will largely depend on local implementation. The Dutch implementation bill is however silent on this topic.
Marketing vs. pre-marketing
The new regime draws a clear line between what is considered pre-marketing and marketing of funds.
Pre-marketing precedes marketing and as such, pre-marketing is not marketing and the other way around. There are however situations where pre-marketing will be deemed to be marketing after all, notably in case of subscription within 18 months following the start of pre-marketing.
Without further going into the requirements of pre-marketing, it is important to understand that – in short – while pre-marketing comes with certain restrictions, marketing may ony take place after a cross-border notification has been duly made.
The CBDR and the ESMA Guidelines include certain quite prescriptive rules on marketing communications. Article 4 of the CBDR starts with the fairly straight forward and standard requirement for fund managers that marketing communications shall be identifiable as such, shall describe risks and rewards and shall be fair, clear and not misleading. The ESMA Guidelines further set out what this general requirement means in practice.
The ESMA Guidelines start by stipulating what constitutes a marketing communication. In short, this includes all messages and material, irrespective of the medium, relating to a particular fund (AIF or UCITS). It excludes statutory information (e.g., prospectus, KIID/KID, annual reports, articles and fund terms) and information not relating to a fund. In addition, any information for the purpose of pre-marketing is also excluded. This is understandable as pre-marketing is not considered marketing and has its own standards for information that can be used for this purpose.
As was the case before, where marketing communications are aimed at retail investors in the Netherlands, they shall be in Dutch. Marketing communications to professional investors in the Netherlands may also be in English
The ESMA Guidelines recommend or even require that specific disclaimers and wording will be used in marketing communications:
- To be identifiable, it is recommended by ESMA that marketing communications include the wording “marketing communication“.
- Marketing communications shall include a general disclaimer stating
“This is a marketing communication. Please refer to the [prospectus of the [UCITS/AIF/EuSEF/EuVECA]/information document of the [AIF/EuSEF/EuVECA] and to the [KIID/KID] (delete as applicable) before making any final investment decisions.“
- In case of short messages the above general disclaimer may be replaced by the words “MarketingCommunication” or the hashtag “#MarketingCommunication“.
- In case of use of past performance, the marketing communication shall include:
“Past performance does not predict future returns.“
- In case of use of expected future performance, the marketing communication shall include:
“The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and/or current market conditions and are not an exact indicator. What you will get will vary depending on how the market performs and how long you keep the investment/product.“
- Future perfomance information shall also be accompanied by a disclaimer on future performance being subject to taxation depending on the personal situation of the investor which may change in the future, as well as a statement that investment may lead to a loss if no capital guarantee is in place.
Prescriptions for marketing communications
In addition to requirements on disclaimers, the ESMA Guidelines including some further new requirements depending on the information to be included in the marketing communications:
- Risks and rewards disclosures should be appropriately balanced, both in content and format. While as such this requirement is not new, the way to secure this is that the font size of risks wording shall be at least equal to the font size of the rewards wording. ESMA also requires that the risks shall be positioned in an equally prominent place, for example in a two-column table mentioning risks and rewards. In addition, at least the risks mentioned in the KIID/KID and the prospectus (!) shall be included. It is unclear how all risks from the prospectus shall be included in marketing communications that are relatively short. I believe that some form of generalisation should still be allowed.
- Marketing communication for retail funds that provide characteristics of the fund, shall make clear that the investment is in the fund and not in the underlying assets. In addition, the investment policy must be briefly described. It is unclear what constitutes the charateristics of a fund. Presumably this relates to the investment strategy or the underlying assets.
- If the investment policy is described, the marketing communication shall include “active” or “actively managed” for actively managed funds and “passive” or “passively managed” as well as “index-tracking” for index-tracking funds. The latter category does not include actively managed index-tracking funds as these are considered actively managed. Marketing communications on actively managed index-tracking funds shall explain the use of the benchmark and the degree of freedom to deviate from the benchmark.
- Short marketing communications on social media shall be as neutral as possible and must include where further information can be found by using a link to the relevant webpage.
- If costs are mentioned the marketing communication must include information for investors to understand the overall impact on the investment and the overall return.
The new rules will have an impact on marketing communications of all funds. Consequently, marketing communications shall be checked on compliance. As indicated, while the CBDD and CBDR apply from 2 August 2021, the ESMA Guidelines apply from six months after final publication, so these are the relevant deadlines for compliance checks. Apart from these checks, the other requirements under the new rules, such as those on pre-marketing and de-notification, may also require attention.
Recent zijn er twee arresten (ECLI:NL:HR:2020:1082 + ECLI:NL:HR:2020:1090) gewezen met betrekking tot de aansprakelijkheid van de behandelend arts voor hulpzaken waarvan bij de uitvoering van de geneeskundige behandelingsovereenkomst gebruik is gemaakt. Het betreft PIP borstimplantaten en de Miragel oogplombe. Wat gebeurt er als een hulpzaak (juridisch) gebrekkig is? Wat vond de Hoge Raad in beide arresten? Wat betekenen deze uitspraken voor de dagelijkse praktijk?
Legaltree-partner Carolien van Weering, specialist aansprakelijkheid in de zorg, in gesprek met Legaltree directeur en oud-minister Ard van der Steur over de aansprakelijkheid van artsen voor schade die een patiënt oploopt als gevolg van een gebrekkige hulpzaak.
Terwijl gezondheidsrechtelijk Nederland de adem inhoudt in afwachting van mogelijke schadeclaims en/of tuchtklachten verband houdende met langere wachttijden en gesloten afdelingen vanwege het Covid-19-virus, heeft het Centraal Medisch Tuchtcollege (Centraal Tuchtcollege) op 4 december 2020 een eerste uitspraak gedaan die haar oorsprong vindt in de coronacrisis.
Het Regionaal Tuchtcollege
De aangeklaagde zorgverlener was internist. Hij was en is werkzaam als directeur van het Centrum Infectieziektebestrijding van het RIVM en tevens voorzitter van het Outbreak Management Team (OMT). Zoals wij de afgelopen maanden hebben geleerd, stelt het OMT adviezen op aan de overheid over de risico’s en de te nemen maatregelen ter bestrijding van de uitbraak van het coronavirus.
De klager was een individuele klager. Hij gaf aan de klacht “namens alle slachtoffers van Nederland qua gezondheid, levensverwachting en financiële schade” te hebben ingediend. De klacht hield in dat de aangeklaagde internist de Nederlandse regering niet heeft geadviseerd de lockdown op te heffen. Volgens klager had hij dit moeten doen toen duidelijk werd dat daardoor meer levensjaren verloren zouden gaan dan er gewonnen zouden worden. Klager stelde dat de lockdown een negatieve invloed heeft gehad op de kwaliteit van het leven van 17 miljoen Nederlanders die twee maanden opgesloten hebben gezeten.
De voorzitter van het Regionaal Tuchtcollege heeft klager in zijn klacht niet-ontvankelijk geacht omdat klager niet behoort tot de kring van klachtgerechtigden zoals bedoeld in art. 65 lid 1 van de Wet op de beroepen in de individuele gezondheidszorg (Wet BIG). De voorzitter oordeelde dat het feit dat klager het klaarblijkelijk niet eens was met de advisering van het RIVM niet kon worden gezien als een bijzonder eigen belang in het kader van de individuele gezondheidszorg. Klager was dus geen rechtstreeks belanghebbende.
Het Centraal Tuchtcollege
Klager is tegen deze beslissing in beroep gegaan. In beroep heeft hij betoogd dat de klacht inhoudelijk dient te worden beoordeeld en alsnog gegrond moet worden verklaard.
Het Centraal Tuchtcollege oordeelde dat tussen de klager en de internist geen sprake was van een individuele arts-patiëntrelatie omdat de klacht betrof het handelen van de internist in zijn hoedanigheid van voorzitter van het OMT. Dit brengt met zich dat de eerste tuchtnorm zoals neergelegd in art. 47 lid 1 van de Wet BIG niet van toepassing is.
Vervolgens beoordeelde het Centraal Tuchtcollege de vraag of hier sprake is geweest van handelen in strijd met art. 47 lid 2 BW van de Wet BIG. Het criterium luidt dat sprake moet zijn van enig ander handelen of nalaten in de hoedanigheid van zorgverlener die in strijd is met het belang van een goede uitoefening van de individuele gezondheidszorg. Klager viste ook bij het Centraal Tuchtcollege achter het net.
Het Centraal Tuchtcollege oordeelde dat de door het OMT uitgebrachte adviezen niet zozeer betrekking hebben op de individuele gezondheidszorg als wel op de publieke gezondheidszorg. Immers zien de adviezen van het OMT op gezondheidsbeschermende en gezondheidsbevorderende maatregelen voor de bevolking of specifieke groepen daaruit. Van individuele maatregelen is geen sprake geweest zodat het handelen van de aangeklaagde internist niet valt onder de reikwijdte van het tuchtrecht. Klager is door het Regionaal Tuchtcollege terecht niet-ontvankelijk verklaard, aldus het Centraal Tuchtcollege.
Beide colleges komen aldus via een andere route tot hetzelfde oordeel.
Recent is er een arrest (ECLI:NL:HR:2021:524) gewezen met betrekking tot de rangwisseling van pandrechten. Wat is de essentie van deze uitspraak? Wat is de lijn tot op heden met betrekking tot de rangwisseling van pandrechten? Waarom is de volgorde van pandrechten van belang? Hoe werkt de rangwisseling van pandrechten in de praktijk? Wat is het achterliggende belang voor een rangwisseling? Waarom meewerken aan een rangwisseling? Wat verandert er naar aanleiding van dit arrest voor de praktijk?
Noot W. Lever MRICS bij arrest Hof Amsterdam 23-02-2021, ECLI:NL:GHAMS:2021:542, Gemeentestem 2021/7525 (93), Wolters Kluwer.
De omstandigheid dat een publiekrechtelijke ontheffing niet is ingetrokken, staat niet in de weg aan de beëindiging van de privaatrechtelijke toestemming door middel van opzegging. Geen onaanvaardbare doorkruising van het publiekrecht. (Hoogheemraadschap Rijnland)