2021-2023 Marketing communications under the regulation on cross-border distribution of funds

The CSSF conducted a thematic review on MCs used by Luxembourg IFMs under the EU Regulation 2019/1156 from 1 April to 31 March 2023. The purpose was to assess compliance with regulatory requirements and enhance investor protection.
Fund managers are responsible for ensuring compliance with Article 4 of the regulation, regardless of who is marketing the fund. IFMs are advised to consider the findings of the review when reviewing procedures and creating new MCs.
The CSSF noted that while the regulations do not provide a precise definition of „marketing communication“, they offer examples to help determine what qualifies.
MCs must be identifiable and prominently disclose „marketing communication“. Disclaimers at the end of documents are insufficient. IFMs should also make it clear which type of investors they are targeting.
MCs should provide consistent information in line with legal and regulatory documents, including prospectuses, KID/KIID, and reports. Weaknesses were found in the description of investment features and inconsistency with fund documents.
MCs should contain fair, clear, and non-misleading information, with different approaches for retail and professional investors. Issues were observed in readability and vocabulary for retail investors.
Regarding costs, MCs should clarify the overall impact of costs and their periodicity, directing investors to find complete cost information in the prospectus.
Performance-related information should be consistent with fund documents and benchmarks, with specific requirements for different types of funds. Non-compliances were found, such as reference periods and lack of updates.
Sustainability-related information should be balanced with other aspects of the investment strategy, with a link to specific fund-related data.
Hyperlinks should point to relevant fund documents, and neutrality should be maintained, especially on social media.