The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

Post-AIFMD marketing of non-French AIFS in France without a passport

Stéphane Puel, Managing Partner, Gide Loyrette Nouel LLP, and Lucy Frew, Head of Investment Funds and Financial Regulation, London

Gide Loyrette Nouel LLP

Q3 2013


The Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) was implemented into French law by an order and a decree published in the French Official Journal on 27 and 30 July 2013 respectively (together the “Implementing Texts”)1.

However, the AIFMD will be fully implemented only when the General Regulation (GR) of the French regulator, the Autorité des Marchés Financiers (AMF), has been amended to incorporate the requirements of the AIFMD. At the time of writing in August 2013, only part of the amendments to the GR have been published, with the remainder expected in September 2013.

The implementation of the AIFMD significantly changes the French legal framework for the marketing in France of foreign investment funds, whether established in an EU Member State or in a third country, which qualify as alternative investment funds (AIFs)2.

Marketing foreign funds in France pre-AIFMD

Prior to the implementation of the AIFMD, marketing and distribution of foreign investment funds in France was permitted3 but in practice depended on whether the fund was open-ended or closed-ended, with a separate set of applicable conditions in each case.

Open-ended funds

A foreign open-ended fund could only be marketed in France to retail investors or to professional investors if it had been authorized by the AMF4. In order to be authorized, the fund had to comply with certain conditions (in particular that the fund be subject to transparency and other measures equivalent to those in France and that an agreement for information exchange and mutual assistance specifically relating to asset management be in place between the AMF and the supervisory authority of the foreign fund) set out in article D.214-1 of the French Monetary and Financial Code (“MFC”). In practice, as far as we are aware, no foreign open-ended fund (other than certain Swiss UCITS-aligned funds) has really succeeded in becoming authorized to date.

Closed-ended funds

If the foreign fund was closed-ended, two options existed. The first was the public offer regime, which was not the route followed by foreign players in practice.

The second was the private placement regime, which permitted the private placement of foreign closed-ended funds to French professional investors. The only condition to be met in this case was for a disclaimer at the beginning of the private placement memorandum and on other documents provided to prospective investors.

Marketing of foreign AIFs to professional investors in France post-AIFMD without a passport


Article L. 214-24-1 I of the MFC provides that any “any French portfolio management company, any management company licensed in an E.U. Member State or any third country manager shall, prior to the marketing of AIFs established in an E.U. Member State or in a third country to professional clients, with or without a passport, file with the Autorité des Marchés Financiers a notification with respect to each AIF it intends to market.

Thus it appears that post-implementation of AIFMD any alternative investment fund manager (AIFM)5 must file a notification with the AMF before marketing any AIF in France irrespective of whether the AIFM and AIF are French, EU or non-EU and also irrespective of whether the marketing is with or without a passport. However, details of the required notification (including timing, form and content) will not be available until publication of the outstanding parts of the amended GR which, as stated above, is expected in September 2013.

Other conditions

In addition, in order to access professional investors in France without a passport, the conditions of article D. 214-32 of the MFC must be met by EU AIFMs with non-EU AIFs and by non-EU AIFMs. The conditions are as follows:

  • The AIFM must comply with the MFC provisions pertaining to AIFs and the French laws and regulations applicable to portfolio management companies (the scope of which in the context of the AIFMD has yet to be defined), with the exception of those provisions pertaining to custodians. It must, however, ensure that the tasks listed under article L. 214-24-8 of the MFC are performed by the custodian designated by the management company. These tasks pertain to cash flow monitoring, custody of assets and the verification of the compliance of certain operations (such as, for example, the issue, redemption and valuation of shares) with the laws and regulations applicable to the AIF as well as with its articles of association and prospectus. The AIFM must also inform the AMF of the identity of the custodian.
  • Appropriate cooperation arrangements for the purpose of systemic risk oversight and in line with international standards need to be in place between the AMF and the supervisory authorities of relevant third countries.
  • If the AIF or AIFM is established in a third country, that third country must not be listed as non-cooperative by the Financial Action Task Force.

Additional condition for open-ended AIFs

A third country open-ended AIF will also, prior to being marketed in France, need to be authorized by the AMF. The conditions for being granted authorization in article D.214-32 of the MFC as amended to implement the AIFMD correspond to those of article D. 214-1 of the pre-AIFMD MFC (which, as mentioned above, as far as we are aware almost no open-ended funds succeeded in satisfying).

Marketing of foreign AIFs to retail investors in France post-AIFMD without a passport

Article L. 214-24-1 III of the MFC provides that “any French portfolio management company, any management company licensed in an E.U. Member State or any third country manager for which France is the member state of reference shall, prior to the marketing of AIFs established in an E.U. Member State or in a third country to retail investors shall comply with the provisions set forth by the General Regulation of the AMF”.

However, the relevant provisions of the amended GR are not yet available at the time of writing and, as stated above, these are expected in September.

French application of the one-year transitional period

The benefit of the one-year transitional period has not been extended to AIFMs marketing in France without a passport. Thus the post-AIFM marketing rules deriving from the Implementing Texts apply immediately and the rules existing prior to the implementation of the AIFMD into French law no longer apply (albeit that pending the publication of the outstanding amendments to the GR, in our view the post-AIMFD regime remains relevant).

Reverse solicitation in France

The AIFMD defines marketing as a direct or indirect offering or placement at the initiative of the AIFM or on its behalf of units or shares of an AIF it manages to EU investors. Therefore, under AIFMD itself, any reverse solicitation or passive marketing whereby an investor initiates the transaction is not in scope of the AIFMD. However, very careful attention need to be given to the differing rules and evidential requirements relating to reverse solicitation by regulators and potentially courts in each relevant jurisdiction.

Under French law, reverse solicitation is permitted so long as it does not fall within the scope of the French definition of “marketing”, which expressly excludes the sale of financial instruments in response to a client’s unsolicited request.

The French Implementing Texts do not contain any provisions that would suggest any change to the reverse solicitation regime. Therefore, professional investors in France should still have access to non-French AIFs through reverse solicitation post-AIFMD implementation, although AIFMs wishing to rely on reverse solicitation may wish to discuss the precise application of the regime with their legal advisors.


The implementation of the AIFMD significantly changes the French legal framework for the marketing in France of foreign AIFs. The further amendments to the GR expected in September 2013 should provide more clarity in relation to this and therefore AIFMs wishing to market in France should monitor developments closely and may wish to discuss the impact of the new regime with their legal advisors.



[1] The order No. 2013-676 dated 25 July 2013 and decree No. 2013-687 published in the French Official Journal on 27 and 30 July respectively.

[2] References to funds in this briefing exclude UCITS funds authorized under the UCITS Directive (2009/65/EC), for which a separate EU regime exists.

[3] In accordance with article L. 211-41 of the French Monetary and Financial Code (“MFC”), as specified by an AMF position paper on the marketing of limited partnerships in France, the “Position AMF n° 2008-16 - La commercialisation des limited partnership en France”.

[4] Pursuant to article L.214-1, II of the MFC.

[5] Although on its face the provision appears not to apply to non-French EU AIFMs legally structured as partnerships rather than companies in our view no exclusion is intended.

Back to Listing

Main Menu

  1. Home
  2. About
    1. Our Core Objectives
    2. AIMA's Policy Principles
    3. Meet the team
    4. AIMA Council
    5. Global Network
    6. Sponsoring Partners
    7. Opportunities at AIMA
    8. AIMA’s 25th anniversary in 2015
  3. Join AIMA
    1. Benefits of Membership
    2. Membership Fees
    3. Application form
  4. Members
    1. AIMA DDQs
    2. AIMA Annual Reports
    3. AIMA Governance
    4. AIMA Logo
      1. Policy note
    5. AIMA Members' List
    6. AIMA Review of the Year
    7. Committees and Working Groups
    8. Weekly News
    9. Update Profile
  5. Investors
    1. AIMA Investor Services
    2. AIMA Members' List
    3. Investor Steering Committee
  6. Regulation
    1. Asset Management Regulation
      1. EU Asset Management Regulation
        1. AIFMD
        2. European Capital Markets Regulation
        3. MiFID / MiFIR
        4. UCITS
        5. European Venture Capital Directive
        6. Shareholder Rights Directive
        7. European Long Term Investment Fund Regulation
        8. Loan Origination Funds
        9. Capital Raising
        10. AIFMD-Related Events
      2. US Hedge Fund Adviser Regulations
        1. Registration and Reporting
        2. Incentive-Based Compensation
        3. JOBS Act
      3. Asia Pacific Asset Management regulation
      4. Other Jurisdictions’ Asset Management Regulation
      5. Private Placement Regime
        1. Canada
        2. Dubai
        3. Finland
        4. Germany
        5. Hong Kong
        6. Japan
        7. Saudi Arabia
        8. Sweden
        9. United Arab Emirates
      6. Systemically Important Financial Institutions ('SIFIs')
      7. Remuneration
        1. UK
        2. United States
        3. CRD IV and CRR
        4. AIFMD
        5. MiFID
      8. Shadow Banking
      9. Volcker Rule
      10. Other
      11. Systemic Risk Reporting
      12. Dealing Commission
      13. Corporate Governance
      14. Securitisation
    2. Markets Regulation
      1. Bank/Capital Regulation
        1. Capital Requirements Directive
        2. EU Bank Structural Reforms
      2. Capital Markets Union
      3. Derivatives/Clearing
        1. EMIR
        2. MiFID II / MiFIR - Derivatives
        3. MAD / MAR
        4. Dodd-Frank Act Title VII
        5. Hong Kong
        6. IOSCO
        7. Singapore
      4. High Frequency Trading
        1. EU automated trading
          1. ESMA Guidelines
          2. Germany
          3. MiFID II / MiFIR - HFT
        2. US automated trading
          1. SEC Regulation SCI
          2. CFTC Automated Trading
        3. IOSCO
        4. Flash Crash
      5. Insurance Regulation
        1. Solvency II
      6. Market Abuse
        1. MAD / MAR
        2. Indices as Benchmarks
      7. Position Limits
        1. MiFID II - Commodities
        2. CFTC Position Limits
      8. Resolution of Financial Institutions
        1. Europe
          1. EU Bank Recovery and Resolution Directive
          2. EU Non-Bank Recovery and Resolution
        2. CPSS-IOSCO
        3. Financial Stability Board
        4. UK
        5. USA
      9. Shadow Banking
        1. International Shadow Banking
        2. EU Shadow Banking
      10. Short Selling
        1. EU Short Selling Regulation
        2. Hong Kong Short Selling Regulation
        3. US Short Selling Regulation
        4. Securities Settlement
      11. Trading
        1. Dodd-Frank Act
        2. MiFID Portal
    3. Tax Affairs
      1. Automatic Exchange of Information (AEOI)
        1. FATCA
        2. EU - AEFI
        3. OECD - Global Standard on AEFI
      2. Australia - Investment Manager Regime (IMR)
      3. Base Erosion - Profit Shifting (BEPS)
      4. FAIFs and FINROFs
      5. FIN 48 and IAS 12
      6. Financial Transaction Tax (FTT)
      7. UK Investment Management Exemption (IME)
      8. UK Offshore Funds Regime
      9. Other
    4. AIMA's Policy Principles
    5. Search
    6. Resources
      1. Guidance Notes
      2. Jurisdictional Guides
      3. Noticeboard
        1. AEOI: FATCA and other regimes
        2. AIFMD
        3. Bank/Capital Regulation (including NSFR)
        4. BEPS
        5. CFTC Registration and Exemptions
        6. Corporate Governance
        7. Dealing Commission
        8. Derivatives
        9. FTT
        10. High Frequency Trading
        11. MiFID / MiFIR
        12. Other Hot Asset Management Topics
        13. Other Hot Markets Topics
        14. Other Hot Tax Topics
        15. Position Limits
        16. Trading
        17. UCITS
        18. UK Partnership Tax Review
        19. US State and Local Taxes
        20. Volcker Rule
      4. Hedge Fund Manager Training
      5. Quarterly Regulatory Update
      6. Webinar Programme
      7. Regulatory Compliance Association
        1. About the Regulatory Compliance Association
        2. RCA Curricula and initiatives for alternative investment firms
        3. Meet the regulators and Sr. Fellows
  7. Education
    1. Research
      1. AIMA Research
      2. Industry research
      3. Search research documents
    2. "The Case for Hedge Funds"
      1. Global Hedge Fund Industry Paper: The value of our industry
      2. The Value of the Hedge Fund Industry to Investors, Markets and the Broader Economy: Research commissioned by AIMA and KPMG
      3. The Evolution of an Industry: KPMG/AIMA Global Hedge Fund Survey
      4. Contributing to Communities: A global review of charitable and philanthropic activities by the hedge fund industry
      5. Beyond 60-40: The evolving role of hedge funds in institutional investor portfolios
      6. The Cost of Compliance: Global hedge fund survey by AIMA, MFA and KPMG
      7. Capital Markets and Economic Growth: Long-term trends and policy challenges
      8. Apples and Apples: How to better understand hedge fund performance
      9. The Extra Mile: Partnerships between hedge funds and investors
      10. Key articles by AIMA on the case for hedge funds
    3. AIMA Journal
      1. Recent issues
      2. Search AIMA Journal articles
      3. AIMA Journal Archive
    4. AIMA Guides to Sound Practices
    5. AIMA guides for institutional investors
    6. CAIA Association pages
      1. Fundamentals of Alternative Investments
    7. Regulatory Compliance Association pages
      1. About the Regulatory Compliance Association
      2. RCA Curricula and initiatives for alternative investment firms
      3. Meet the regulators and Sr. Fellows
    8. Certified Investment Fund Director programme
    9. Services to Start-up Managers
    10. Glossary
  8. Events
    1. AIMA Events
    2. AIMA webinars
    3. Industry events
  9. Media
    1. Press Releases & Statements
    2. AIMA's blog
    3. Media Coverage
      1. Articles by AIMA
        1. Archive
      2. AIMA in the news
      3. Video interviews
      4. Industry news
    4. Media Contact
    5. Press Materials

Sub Menu

  1. Education
    1. AIMA Journal
    2. Bibliography
    3. CAIA Designation
    4. Research
    5. Roadmap to Hedge Funds
    6. AIMA's Investor Steering Committee Paper
    7. Glossary
  2. Regulatory, Tax, Policy & Government Affairs
    1. AIMA Position Papers
    2. AIMA Responses
      1. Australian Tax Office
      2. Authority for the Financial Markets
      3. Committee of European Banking Supervisors
      4. Committee of European Securities Regulators
      5. Commodity Futures Trading Commission
      6. Dubai Financial Services Authority
      7. European Commission
      8. European Securities and Markets Authority
      9. Swiss Financial Market Supervisory Authority
      10. Financial Services Authority (UK)
      11. Financial Services and the Treasury Bureau
      12. Guernsey Financial Services Commission
      13. HM Revenue & Customs
      14. HM Treasury
      15. Independent Commission on Banking
      16. IOSCO
      17. Monetary Authority of Singapore
      18. Securities and Exchange Board of India
      19. Securities and Exchange Commission (USA)
      20. Securities and Futures Commission
      21. Singapore Exchange
      22. The Takeover Panel
      23. US House of Representatives / Senate
      24. Federal Deposit Insurance Corporation
      25. Financial Stability Oversight Council
      26. Financial Stability Board
      27. US Treasury
      28. Internal Revenue Service
      29. US Federal Reserve
      30. Financial Industry Regulatory Authority (FINRA)
      31. Council of European Union
      32. Hong Kong Exchanges and Clearing
      33. House of Lords
    3. AIMA Summaries
      1. CESR
      2. European Commission
      3. Financial Services Authority (UK)
      4. HM Revenue & Customs
      5. HM Treasury
      6. IOSCO
      7. Securities and Exchanges Commission
      8. FSOC
      9. CFTC
    4. Guidance Notes
    5. Jurisdictional Resource
    6. AIMA Noticeboard
      1. EU Directive on Alternative Investment Fund Managers
      2. FSA Remuneration Code
      3. Short Selling
      4. US Dodd-Frank Wall Street Reform and Consumer Protection Act
      5. UK Stewardship Code
      6. Securities Law Directive
      7. EU Directive on Alternative Investment Fund Managers - Level II
      8. EU Directive on Markets in Financial Instruments (MiFID)
      9. International Financial Centres
      10. Bribery Act
      11. Market Abuse Directive
      12. MF Global
      13. FATCA
      14. FTT
      15. Other Tax Issues
    7. AIMA Regulatory Update
  3. Sound Practices
    1. Due Diligence Questionnaires
    2. Guides to Sound Practices
  4. Start-Up Service Providers
  5. Useful Websites