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Rule change on the requirement to appoint a centralizing agent for the marketing of foreign AIFs in France

Under French law, the marketing in France of EU alternative investment funds (AIFs) by EU alternative investment funds managers (AIFM) under the European passport required the appointment of a centralizing agent (correspondant centralisateur).

Following the amendment of the General Regulation of the Autorité des Marchés Financiers (see Order of the Finance Minister dated 4 May 2015, Official Journal – 10 June 2015 – the Arrêté), EU AIFMs are no longer required to appoint a centralizing agent when marketing EU AIFs to professional clients in France.

Background

A centralizing agent is a financial institution responsible, in particular, for processing subscription and redemption requests, making coupon and dividend payments, supplying information documents to local investors and, where applicable, paying the fees due to the regulator.

The appointment of a centralizing agent is not a requirement under the AIFM Directive (AIFMD).

However, until the entry into force of the Arrêté, French law required EU AIFMs to appoint a French-located centralizing agent when marketing, under the European passport, EU AIFs in France to professional investors. This rule was questioned by certain market participants who considered that this additional requirement was not in line with the AIFMD provisions in relation to the passporting of EU AIFs.

New rule

EU AIFMs are no longer required to appoint a centralizing agent when marketing EU AIFs to professional clients in France under the European passport.

However, the appointment of a centralizing agent remains mandatory in the following cases:

  • marketing in France of a foreign (EU or non-EU) AIF managed by a foreign (EU or non-EU) AIFM to retail investors;
  • marketing in France of a non-EU AIF managed by a foreign (EU or non-EU) AIFM to professional clients (without a passport); and
  • marketing in France of an EU AIF managed by a non-EU AIFM to professional clients (without a passport).

Remaining issue: passporting fees

Although not provided under the AIFMD, the marketing of an AIF in France under the European passport requires the payment of certain fees to the French regulator. This payment has been raised as an issue by the European Private Equity & Venture Capital Association at the ESMA level.

So far, there is no hint or indication from the French regulator that it is considering or would consider in the future the suppression of the passporting fees.

Please contact Jean-Baptiste Poulle or Sandra Kahn if you need further advice on the marketing of AIFs in France.

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