The EU Commission has proposed amendments to AIFMD in response to concerns about reverse solicitation and potential circumvention of AIFMD compliance. The proposal introduces a new concept of premarketing to provide clarity around reverse solicitation and ensure compliance. Premarketing would allow managers to promote funds while preventing strategies that use reverse solicitation to avoid AIFMD requirements.

2. EU Commission proposal to amend AIFMD
• With introduction of AIFMD there have been extensive talks around reverse solicitation rule.
• AIFMD Recital 70 states that the provisions of AIFMD should not affect the current situation,
whereby a professional investor domiciled in the European Union may invest in AIFs at its own
initiative and irrespective of where the AIFM and/or the AIFs are domiciled
• Reverse solicitation has been used to justify inflow of capital from European domiciled
professional investors to managers that did not comply with AIFMD
• Potential for the facto circumvention of AIFMD compliance
• Proposal of the European Commission in March 2018 for an Omnibus Directive and introduction
of a new concept of premarketing under AIFMD

3. Premarketing and Reverse Solicitation
• Marketing and reverse solicitation rule under AIFMD share the same destiny
• These are interpreted differently – in a more extensive or restrictive fashion – depending on the
European domicile at issue.
• Moreover the reverse solicitation is not a positive concept, rather an exclusion of the dynamic of
the offer.
• For the lack of a European definition of reverse solicitation, this is where the latest proposed
definition of premarketing steps in
• The approach adopted with the amended definition of premarketing ensures that,
• on the one hand, premarketing remains a possibility; and
• on the other, prevents that any such premarketing strategies are used to ultimately invoke reverse
solicitation and de facto circumvent compliance with AIFMD

4. Useful Links
• Proposal for Directive on cross-border distribution of investment funds
(https://ec.europa.eu/info/law/better-regulation/initiatives/com-2018-92_hu#initiative-subscribe)
• Draft report voted by ECON
(http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=PE627.813&format
=PDF&language=EN&secondRef=02)

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