AIFMD 2.0: Focus on marketing of funds in the EU

The directive that makes amendments to the Alternative Investment Fund Managers Directive (AIFMD)¹ (and, to the relevant extent, the UCITS Directive)², referred to as “AIFMD 2.0”³ entered into force on 15 April 2024. EEA Member States have 24 months to implement the provisions of AIFMD 2.0 into the national law, with the provisions on AIFMD 2.0 going live on 16 April 2026.

AIFMD 2.0 makes targeted changes to certain provisions of AIFMD. In this OnPoint, we look at the key changes that AIFMD 2.0 will make to requirements in relation to marketing alternative investment funds (AIFs).

Marketing as a delegated function of the AIFM

Article 20 (Delegation) as amended by AIFMD 2.0 now makes it explicit that delegation of the marketing function by an EU AIFM falls under the obligations of this Article, with all functions referenced in Annex I of AIFMD 2.0 being within scope of the delegation provisions⁴. As such, an EU AIFM delegating marketing to a third-party distributor will need to notify its home state regulator before the delegation becomes effective. It remains to be determined what form this prior notification will take in each EU jurisdiction.

If the marketing function is performed by one or several distributors acting on their own behalf and who market the AIF in accordance with MiFID⁵ or through insurance-based investment products in accordance with the Insurance Distribution Directive⁶ such function shall not be considered to be a delegation, irrespective of any distribution agreement in place between the AIFM and the distributor. The amendment made to Article 20 is helpful as it clarifies that the framework relating to the delegation under AIFMD will not apply to these relationships.

Whilst this carve-out may in practice have a limited impact on EU AIFMs, who often appoint a global distributor acting on their behalf, we would nevertheless anticipate some revisions to distribution agreements to clarify that the relevant distributors act “on their own behalf” rather than on behalf of the AIFM.

There are several areas where the market would welcome clarification, for example:

1. the meaning of marketing “in accordance with Directive 2014/65/EU” (i.e. MiFID) and whether this language is only intended to capture firms authorised to provide MiFID services, or also firms that can provide MiFID services without a full MiFID authorisation, such as tied agents (e.g. in Luxembourg, the position is that an AIFM can directly appoint a tied agent if the AIFM assumes the marketing function itself⁷);
2. how the carve-out will be applied to various situations involving nominees with a MiFID licence; and
3. whether the carve-out could apply to third-country firms appointed by AIFMs to carry out distribution which cannot be authorised under MiFID or any UK firms which are approved to provide MiFID services or are tied agents based on pre-Brexit MiFID equivalent regulations.

Investor facing changes: Disclosures and reporting (Article 23 of AIFMD)

Changes introduced by AIFMD 2.0 will result in AIFMs having to provide additional information to investors, owing to amendments to Article 23 made by AIFMD 2.0.

In addition to providing already required information, the AIFMs managing EU AIFs, and marketing any AIFs in the EU, will now need to make available the following additional information to investors before they invest in an AIF, as well as any material changes thereof:

• the name of the AIF – this change will bring the name of the AIF into the scope of the European Securities and Markets Authority’s (ESMA) recent Guidelines on the use of environmental, social, and governance (ESG) related terms in fund names (Guidelines), meaning in broad terms that if a fund is using sustainability or ESG-related terms in its name, the fund’s ESG profile must correspond to its name in line with the Guidelines⁸. Also, with respect to fund names, under AIFMD 2.0, ESMA is mandated to develop guidelines specifying the circumstances where the name of an AIF is unclear, unfair, or misleading. This mandate relates to funds’ names in general, not only sustainability-related ones;
• to the extent applicable, the possibility of, and conditions for, using liquidity management tools selected in accordance with Article 16(2b) as amended pursuant to AIFMD 2.0; and
• a list of fees, charges and expenses that are borne by the AIFM in connection with the operation of the AIF and that are to be directly or indirectly allocated to the AIF.

AIFMs will also have to periodically provide the following additional information to investors:

• the composition of the originated loan portfolio (where applicable);
• on an annual basis, all fees, charges and expenses that were directly or indirectly borne by investors; and
• on an annual basis, any parent undertaking, subsidiary or special purpose vehicle utilised in relation to the AIF’s investments by or on behalf of the AIFM.

AIFMD 2.0 does not provide a mandate to ESMA to develop any delegated acts that would provide further detail on these requirements. It remains to be seen whether ESMA or any national competent authority (NCA) will issue guidance or frequently asked questions (FAQs) setting out how granular these additional disclosures must be.

Regulatory Reporting Obligations (Annex IV) (Article 24 of AIFMD)

AIFMD 2.0 also introduces increased reporting obligations under Article 24 (Reporting Obligations to Competent Authorities).

Under AIFMD 2.0, the AIFM is to regularly report to the relevant EU NCAs – either their home EU NCA or the EU NCA of the country into which they market the AIFs in case of a non-EU AIFM – on the markets and instruments in which it trades on behalf of the AIFs it manages, where it actively trades, and on the exposures and assets of each AIF it manages. For more perspective on what this means, the reporting is no longer limited only to ‘principal’ markets and instruments nor limited to ‘principal’ exposures and ‘most important’ concentrations of each AIF. Reporting is also expected to be much more comprehensive than before.

Amendments introduced by AIFMD 2.0 also require reporting of significantly more detail on the delegation arrangements concerning portfolio management or risk management, to the extent applicable.

In terms of practical preparations for the new requirements in relation to reporting, these changes should in principle apply from 16 April 2026. ESMA is mandated to draft regulatory technical standards (RTS) to provide more details as to what will be required under in the reports, as well as the frequency and timing of the reporting. However, ESMA only needs to submit the draft RTS to the EU Commission by 16 April 2027 – which is one year after AIFMD 2.0 starts to apply. If the templates for the new reporting are not available by 16 April 2026, this may push back the practical application of these new requirements to 2027.

Third-country sponsors of EU AIFs

AIFs managed by third-party EU AIFMs

Third-country sponsors without an EU presence will continue to be able to appoint third-party EU AIFMs (or “white label” AIFMs) to manage their EU AIFs. Such AIFs will be able to benefit from the EU-wide AIFMD marketing passport. Under such arrangements, the EU AIFM will remain responsible for obtaining the marketing passport, however, third-party EU AIFMs rarely have their own investor relations teams and prefer for the actual marketing to be undertaken by a distributor. The abovementioned marketing delegation rules will apply between such third-party EU AIFMs and the chosen network of distributors.

In such situations, the Cross-Border Distribution of Funds Directive⁹ will also continue to apply and remains relevant, in particular in relation to any pre-marketing undertaken by the third-country sponsor before the third-party EU AIFM has been formally appointed. Where pre-marketing is taking place, a pre-marketing notification may be required – which should be submitted within two weeks of pre-marketing having taken place, identifying an EU AIFM as responsible for such pre-marketing.

Marketing of AIFs managed by non-EU AIFMs in the EU (article 42 of AIFMD)

Article 42 of AIFMD provides conditions for the marketing in the EU of AIFs managed by a non-EU AIFM. The ability of a non-EU AIFM to market an AIF in the EU will remain possible and will remain conditional on complying with certain requirements, some of which are amended by AIFMD 2.0, such as:

• compliance with the amended Article 23 (Disclosure to investors) of AIFMD (see above);
• compliance with the amended Article 24 (Reporting obligations to competent authorities) of AIFMD (see above); and
• changes relating to the countries in which the non-EU AIFM and/or non-EU AIF can be established.

On the last point, Article 42 as amended by AIFMD 2.0 provides that:

1. non-EU AIFMs or non-EU AIFs should not be located in a high-risk third country pursuant to the EU’s Anti-Money Laundering Directive (EU AMLD)¹⁰. This is instead of not being established in a country listed as a Non-Cooperative Country by FATF¹¹, as is currently provided under AIFMD. FATF identifies on its list jurisdictions having strategic deficiencies in their regimes to counter money laundering and terrorist financing and publishes the list three times a year. The EU’s list considers the recommendations provided by FATF but is not obliged to follow them. The periodic amendment of the EU list requires the EU Commission to adopt a delegated regulation through the ordinary legislative process, which not only provides opportunities to discuss and amend the FATF list but may also cause delay between the implementation of changes to the FATF list and the EU list;
2. as a new requirement, AIFMD 2.0 provides that the third country where the non-EU AIF or non-EU AIFM is established must have “signed an agreement with the Member State of reference and with each other Member State in which the units or shares of the non-EU AIF are intended to be marketed that fully complies with the standards laid down in the OECD Model Tax Convention and ensures an effective exchange of information in tax matters”; and
3. as another new requirement, the third country where the non-EU AIFM or non-EU AIF is established must not be mentioned on the revised EU list of non-cooperative jurisdictions for tax purposes¹².

Non-EU AIFMs and EU management and marketing ”passport”

AIFMD 2.0 has not removed the, currently unused, provisions in Articles 37, 39 and 40 setting out the circumstances in which a non-EU AIFM can obtain authorisation to manage EU AIFs and/or market AIFs in the EU under a third-country marketing passport.

However, this regime has still not been implemented. Instead, AIFMD 2.0 has merely updated the provisions of Articles 37 and Article 40 to reference the same changes as those made to Article 42 (see above) in relation to the permitted location of the non-EU AIFM and non-EU AIFs.

As a reminder, post-Brexit, the UK is a non-EU jurisdiction and any UK sponsor, UK AIFM or UK AIF will need to follow the rules applicable to non-EU sponsors, non-EU AIFMs and non-EU AIFs when marketing in the EU. The UK is not currently proposing to introduce changes similar to AIFMD 2.0 for its internal market.

Timing and next steps

There are no express exemptions or transitional provisions with regards to new obligations under Article 42 (and by extension Article 23 and 24) of AIFMD 2.0, or the provisions relating to marketing.

EEA Member States have until 16 April 2026 to implement AIFMD 2.0 into national law. However, the Annex IV reporting RTS may be published as late as 16 April 2027 and as such may practically push the Annex IV reporting changes to that date.