Greek Law 4920/2022 on the cross-border distribution of funds

Law 4920/2022 transposing inter alia Directive (EU) 2019/1160 (the “CBDF Directive”) into Greek law entered into force on 15 April 2022 and amended the provisions of Law 4099/2012 on the distribution of undertakings for collective investment in transferable securities (the “UCITS Law”) and Law 4209/2013 on alternative investment fund managers (the “AIFM Law”).

The CBDF Directive (as transposed) and Regulation (EU) 2019/1156 on facilitating the cross-border distribution of collective investment undertakings (the “CBDR”) aim to enhance investor protection and to harmonise national laws and procedures on the cross-border marketing and distribution of undertakings for collective investment in transferable securities (“UCITS”) and alternative investment funds (“AIFs”) within the EU by reducing regulatory barriers.

Marketing communications

• The requirements relating to marketing communications for UCITS (under the CBDR) also apply to EU AIFMs, thus ensuring a higher standard of investor protection.
• Marketing communications and material must be notified to the Hellenic Capital Markets Commission but there is no prior notification requirement.
• All informational and marketing material distributed to investors (save for the key investor information document) must contain a specific disclaimer that UCITS offer no guaranteed return and that past performance does not guarantee future returns.

Facilities available to retail investors

• The requirements applicable to UCITS for providing facilities to retail investors also apply to EU AIFs.
• Facilities can now be made available to retail investors remotely by electronic means and a physical presence in Greece is no longer required.

Pre-marketing of AIFs to professional investors

Harmonised pre-marketing rules are introduced. EU AIFMs are permitted to engage in pre-marketing of an AIF to potential professional investors or of a compartment thereof, which is not yet established or which has not yet been notified for marketing, under the marketing passport regime. The information provided must not be sufficient to allow investors to commit to acquiring shares in an AIF and must not constitute an offer or an invitation to subscribe for shares in an AIF.

Any subscription by professional investors to units or shares of an AIF referred to in the context of “pre-marketing”, within eighteen (18) months of the EU AIFM having initiated the pre-marketing, will nonetheless be deemed to have been as a result of marketing, triggering the notification requirements of the AIFM Law.

EU AIFMs are required to notify their local regulator of their intention to engage in pre-marketing in certain jurisdictions; this notification process must be completed within two (2) weeks of pre-marketing having begun.

The new pre-marketing rules do not apply to non-EU AIFMs/AIFs marketed in Greece.

Discontinuation of marketing

A new regime for the discontinuation of marketing of units or shares of UCITS or EU AIFs (closed-ended EU AIFs excluded) in Greece is introduced. De-notifications must be submitted to the competent authority of the UCITS/AIFM’s home member state.

In particular, for the de-notification of UCITS, a thirty (30) day blanket offer to repurchase or redeem (free of any charges or deductions) all shares or units held by investors in Greece must be made publicly available and any contractual arrangements with financial intermediaries must be modified or terminated with effect from the date of de-notification.

The above rules also apply to the de-notification of EU AIFs (closed-ended EU AIFs excluded) in Greece. Further, for a period of thirty-six (36) months following the de-notification date, the AIFM is prohibited from engaging in pre-marketing of the EU AIF referred to in the notification or in relation to similar investment strategies or ideas to investors in Greece.

This article does not cover every change introduced by Law 4920/2022 and is for general guidance only.

This article is for general information only and does not constitute legal advice. For advice on a specific matter, please contact us.