On 2nd September 2021, the MFSA issued a Circular on amendments made to the Conduct of Business Rulebook (the 'Rulebook') applicable to Regulated Persons.

By way of summary, the revisions made the Rulebook consist of the following:

  1. Section 2 of the Rulebook now includes a new Part D which incorporates article 4 of Regulation 2019/1156 on the Cross-Border Distribution of Funds which is directly applicable to licence holders. According to this newly added section, a UCITS Management Company or the UCITS (where the UCITS has not designated a UCITS Management Company) must ensure that it makes adequate arrangements for the marketing units of UCITS, including adequate distribution arrangements. Furthermore, all marketing communications addressed to investors (or potential investors) must clearly identifiable as such and describe the risks and rewards of purchasing units of a UCITS in a clear manner, and all information must be fair clear and not misleading.

A UCITS Management Company or the UCITS must also ensure that; marketing communications that contain specific information about a UCITS do not contradict the information contained in the prospectus and in the key investor information. All marketing communications must also indicate that a prospectus exists and that key investor information is available. Such marketing communications are to specify where, how and in which language investors or potential investors can obtain the prospectus and the key investor information and should provide hyperlinks to or website addresses for the said documentation.

  1. A new Appendix 9 has been included to Chapter 1 in order to implement the provisions of the ESMA Guidelines on marketing communications under the Regulation on Cross-border Distribution of Funds. The requirement contained in this Appendix aims to establish common principles on the identification as such of marketing communications, the description of risks and rewards of purchasing units of a UCITS in an equally prominent manner, and the fair, clear and not misleading character of marketing communications, also taking into account on-line aspects of marketing communications.

This Appendix applies to all marketing communication addressed to investors or potential investors for UCITS.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.