Clarification of certain aspects of the pre-marketing rules for alternative investment fund managers

The pre-marketing regime was transposed into Danish law in the Danish Alternative Investment Fund Manager etc. Act ("AIFM Act") on 1 July 2021. 

Pre-marketing means the provision of information or communication, directly or indirectly, on investment strategies or investment ideas by or on behalf of an AIFM to potential professional investors in Denmark in order to test their interest in an AIF or a compartment (sub-fund) which is not yet established, or which is established, but not yet passported for marketing with the Danish FSA, and which in each case does not amount to an offer or placement to the potential investor to invest in the interests of that AIF or compartment (sub-fund). We refer to our previous newsletter of 28 June 2021 on these amendments.

The fact that the Danish FSA maintained the Q&A guidance on its website in respect of the existing (and in some ways broader) domestic pre-marketing regime has caused uncertainty as to whether this regime was intended to continue to be in place in parallel to the new rules on pre-marketing included in the AIFM Act.   

However, on 2 December 2021, the Danish FSA has updated its Q&A guidance, which clarifies certain aspects of the pre-marketing rules for alternative investment fund managers.  

The Danish FSA has now announced in its updated Q&A, that the Danish legislation only permits non-EU AIFs to market units in alternative investment funds in accordance with Section 130 of the AIFM Act, which requires the Danish FSA's permission to market units in alternative investment funds for professional investors in Denmark and for retail investors if the conditions in section 5 a of the AIFM Act also are met. Consequently, the Danish legislation does not contain other possibilities for non-EU AIFs to market units in alternative investment funds in Denmark or to carry out pre-marketing in Denmark. 

The Q&A also clarifies that sales of units in alternative investment funds on the request of a customer will not be construed as marketing as long as there has been no advertising or the like of the alternative investment fund.

The pre-marketing rules only apply to AIFMs licensed in Denmark or another EEA Member State and therefore AIFMs registered by the Danish FSA cannot rely on the pre-marketing regime. Furthermore, pre-marketing activities aimed at semi-professional investors are no longer permitted. 

Accordingly, in many ways the transposition of the pre-marketing regime in CBDF into Danish law represents a narrowing of the scope of the access to pre-marketing in Denmark.