Avoiding the confusion and effort involved in complying with CBDF

The implementation of the Cross-Border Distribution of Funds (CBDF) in August 2021 meant major changes to the marketing of funds in Europe. Fund Managers can capitalise on these changes but doing so means satisfying a number of requirements.

To benefit from these changes, Fund Managers need to understand the new requirements such as working the new notification periods into their processes for share class launches and prospectus amendments. There can also be confusion over which parts of the CBDF apply to UCITS and which parts apply to AIFs, especially at the pre-marketing stage. Furthermore, the lower level detail concerning notifications and facilities have stringent requirements that must be met.

Staying with notifications and facilities, the delayed implementation by regulators, particularly in Italy and Spain can cause further confusion amongst Fund Managers. Deciphering exactly the countries where CBDF has been fully implemented, which countries still need a paying agent and what the manager is supposed to do in countries where it was not previously necessary to appoint a Paying Agent are all concerns for a manager trying to comprehend the CBDF adequately.

We asked Martin Neason, FE fundinfo’s Market Specialist Executive, Global Funds Registration to introduce our new European Facilities Service, designed to help Fund Managers avoid the confusion and effort involved in complying with EU legislation.

Why are you offering a European Facilities Service?

The CBDF removed the requirement to appoint a physical presence in the host jurisdiction to provide paying agent services, but surprisingly, it introduced the requirement for a fund to provide Facilities to investors to process subscription, repurchase and redemption orders and to obtain information regarding the operation of the fund.

Using our knowledge of the Directives supporting the CBDF, we have introduced our European Facilities Service to enable funds to meet this new requirement.

What problem does it solve for Fund Managers?

The service will handle all incoming communications from investors and regulators and ensure that they are dealt with in accordance with the manager’s requirements and/or the rules laid out in the fund’s Prospectus.

The benefits of the service are twofold. Firstly, Fund Managers using the service will enjoy increased speed to market in the EU/EEA countries in which their funds are registered. Secondly, the service removes the fund’s reliance on the existing costly and often, cumbersome paying agent infrastructure that currently supports the registrations in most EU countries.

How easy is it to migrate to FE fundinfo’s service?

It will be necessary to adhere to the notice periods of the current paying agents, their invoice periods and the necessary 30-day notice period to the Home and Host regulators. The notice and invoice periods will be different for each supplier in each country. Managing all of these requirements can be a time-consuming process, but once these requirements have been met, the fund can begin to use our European Facilities Service.

Managers that are already using our Global Funds Registration service will be pleased to hear that handling all of the above tasks is automatically included in the Registration Maintenance service we currently provide. If a manager wants to use our European Facilities Service they will need to handle all these tasks themselves and once they are complete, just need to advise us when, and in which country, they want our European Facilities Service to operate.

What do Fund Managers need to do to find out more about European Facilities Service?

Fund Managers should contact their Global Funds Registration Manager, their FE fundinfo Account Manager, or visit our European Facilities Service page below for more information.