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The European funds regulatory landscape: A guide for non-European managers

The European funds regulatory landscape: A guide for non-European managers

23 April, 2024
Europe Funds Fund Administration Fund Accounting AIFM Depositary Services Investor Services

Managers with experience in setting up funds in Delaware or Cayman often find the European regulatory landscape daunting. When you first get hit by the blizzard of acronyms – AIFMD, CBFD, NPPR, etc – it can certainly feel overwhelming.
But you don’t need to know it all, at least not right away. As you consider raising capital in Europe, there are three key regulatory frameworks to be aware of.

Three key regulatory frameworks for marketing in Europe


For alternative fund managers with an interest in Europe, AIFMD is the one regulation to rule them all. AIFMD covers European fund managers and those looking to sell non-European alternative funds into the EU. AIFMD requires Alternative Investment Funds (AIFs) based in Europe to have an Alternative Investment Fund Manager (AIFM).

AIFMD is a comprehensive set of regulations governing all aspects of AIF operation in Europe, but at this stage its most important stipulations are around marketing. They are:

AIFMD EU passporting allows an AIFM to market an onshore (EU-domiciled) fund to professional investors in the fund’s home nation and throughout the EU, without having to follow separate national rules. It makes pan-European marketing simpler and more cost-efficient.

Article 42
If either the fund or AIFM is based outside the EU, funds can use Article 42 to market the fund in individual EU states. This is also known as the National Private Placement Scheme (NPPR) and involves navigating marketing rules that can vary widely from country to country. For that reason, it is most appropriate for funds that are targeting investors in a limited number of EU states. 

Reverse solicitation
When an investor approaches a fund (rather than the other way round), other marketing rules do not apply. However, funds have to be able to show that the reverse solicitation was genuine and not the direct result of marketing or advertising. 

2. Cross-Border Fund Distribution Directive (CBFD)

The CBFD is designed to make EU alternative fund regulation consistent across the EU. One area of note is in its treatment of marketing and pre-marketing activities. Most importantly, the CBFD states that an AIFM must set up facilities in every member country where it intends to market to retail investors. 

3. ESMA Guidelines

The CBFD has recently been supplemented by ESMA Guidelines on Marketing Communications, which give more detail about the content of pre-marketing and marketing materials. ESMA creates expectations around the clarity, fairness and accuracy of pre-marketing content (such as a teaser, presentation or pitch book) in particular.

Ocorian Fund Services

At Ocorian we have extensive experience supporting US fund managers with setting up alternative investment funds in Europe and administering them throughout their lifecycle.

We have teams across seven jurisdictions in Europe that provide a high touch, technology first approach combined with local expertise.

We offer a full service offering from fund set up and administration through to fund accounting, AIFM, investor services and depositary.

  • Fast and efficient set up of funds in Europe
  • Teams based in the UK, Jersey, Guernsey, Ireland, The Netherlands and Luxembourg
  • AIFM in Ireland and Luxembourg
  • Expertise in administering vehicles parallel to existing US or Cayman structures
  • Jurisdiction agnostic
  • Full service provider

Our business development team in the US will be happy to discuss your European requirements and guide you through the process. Contact us for more information.

A guide to raising capital in Europe

This article is extracted from Ocorian's guide on how to raise capital in Europe, aimed at non-European asset managers. In this guide, we provide a pragmatic overview of the fundraising process and answer the most frequent asked questions asked by investment managers including:

  1. Should you set up a new fund or use an existing offshore structure?
  2. What is pre-marketing and which activities are forbidden?
  3. What are the pros and cons of the different approaches to marketing in Europe?
  4. How important is ESG when marketing funds in Europe?


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