Fund Distribution Alert 2021-13

Marketing guidelines for UCITS and AIFs now available!

Marketing guidelines for UCITS and AIFs now available!


Said Fihri

Partner, ADV – Investment Services

KPMG in Luxembourg


On 27 May 2021, ESMA published the final report regarding the guidelines for marketing communications which will apply to UCITS Management companies, AIFMs, EuVECA managers and EuSEF managers.

This final report contains a feedback statement mentioning modifications and clarifications which have been made further to the public consultation which ended on 8 February 2021. This consultation paper covered by our fund distribution alert of 10 November 2020 was prompted by the updated Regulation (EU) 2019/1156 of 20 June 2019 (please see our fund distribution alert of 16 July 2019 for more information) and more particularly Article 4(1), issued along with a directive to facilitate fund distribution. The report furthermore features a cost-benefit analysis in addition to the guidelines themselves.

As a reminder, the proposed guidelines address the following notions from article 4(1) of the Regulation:

  1. marketing material shall be identifiable as such;
  2. they shall describe the risks and rewards of purchasing units or shares in an equally prominent manner; and;
  3. contain information, which is fair, clear and not misleading.


ESMA reminds national competent authorities and financial market participants that they must make every effort to follow the recommendations, that the guidelines are compatible with any existing harmonised EU rules and do not intend to replace existing national requirements.

In the final guidelines which have been published, the ESMA added a non-exhaustive list of communications that may or may not be considered as marketing communications. Examples of the former included e.g. press articles, interviews, factsheets, social media or discussion forum messages and individually addressed material. Examples of communications which are not considered the be marketing in nature include legal documents, dividend announcements, certain corporate announcements, communications not mentioning a product and pre-marketing communications.

Identification as such of marketing communications

As regards the first of the three points, the final guidelines state that before publication of any marketing communication, it has to be ensured that the relevant product has been (where applicable) authorized by the home member state and/or the targeted host member state.

As already stated in the draft guidelines, ESMA reconfirmed that it should be clear that the communication “has a purely marketing purpose, is not a contractually binding document or an information document required by any legislative provision and is not sufficient to take an investment decision”. To this effect, to enable anyone to identify that the content is a marketing communication, it is required that each communication includes the term “marketing communication”. In addition, the inclusion of a specific disclaimer which should be clearly displayed will be required as follows:

“This is a marketing communication. Please refer to the [prospectus of the [UCITS/ AIF/EuSEF/EuVECA]/Information document of the [AIF/EuSEF/EuVECA] and to the [KIID/KID](delete as applicable)] before making any final investment decisions.”

When this disclaimer isn't appropriate for the format or length of an online marketing communication (banner, short videos lasting only a few seconds…), words such as "Marketing Communication" can be used. For social media platforms the use of a hashtag is authorised: "#MarketingCommunication".

For videos, this disclaimer should be embedded and not be featured at the end.

Short marketing communications should be neutral and indicate an alternative source of detailed information and include a link to said website. Any reference to an external document should come along with the source of the information.

It is stated that unless it is suitable, a marketing communication should not be deemed identifiable as such, if it contains excessive cross references to legal or regulatory provisions.

Equal prominence to risk and rewards

Concerning the second point, it is specified that marketing communications should always be accurate and give a fair and prominent indication of the risk whenever any potential benefit is mentioned. It should also be presented with at least a font and size which is equal to the predominant font size used throughout the provided information as well is in a visible position (for example not in a footnote, in small characters or in another document/material). Furthermore, when mentioning rewards, the risks should always be presented at the same level or immediately thereafter.

Fair, clear and not misleading

Professional and retail investors

The third point focuses on the suitability of the communication to target investors (retail or professional) and that the communication is consistent with the other fund documents to describe the features of the investment.

To this effect, ESMA highlights that all marketing communications should contain information, which is fair, clear and not misleading even if the level of information and its presentation can be adapted based on the targeted investor type. Especially where retail investors are targeted, it must be ensured that information is easily understandable (excessively technical words should be avoided, adequate explanations or definitions should be given…). The communications should be written in the official language/s or any accepted language of the Members State.


The final guidelines reconfirm that marketing communication should be consistent (meaning that it should not contain diminish or contradict information in terms of wording and presentation) with the official documents of the product such as the prospectus, the constituting documents, KIIDs/KIDs, information on websites and financial reports. This includes the fund’s investment policy, the fund’s recommended holding period, any information on costs, risks and rewards, past and future performance (in particular, when the performance is measured against a benchmark index in the prospectus) and the investment’s sustainability-related aspects. For the latter, a link to the website where this information is available in accordance with Regulation (EU) 2019/2088 (the SFDR) should be added and the communication should mention that the decision to invest in the promoted fund should take into account all the characteristics or objectives of the promoted fund as described in the fund documents.

Feature description

Specific requirements apply depending on various features which are mentioned. The information of these features must be up to date, be provided in a proportionate manner, be sufficient to understand key elements and include a short description of the investment policy. For retail investors, it must be specified that the they invest in the fund and not its underlying assets.

Examples of features treated include the use of leverage, which should be accompanied with an explanation on the impact of this characteristic on the risk of potential increased losses or returns. Moreover, when the investment policy is described, it should be specified whether the fund is actively or passively managed. References to national competent authorities should be avoided and may not be used as a sales argument.

The amount and presentation of information should be adapted to the used communication media to ensure that information is easily readable and to enable the average members of the group of investors to understand the key elements. Indicated information should be objective and do not including overoptimistic wording that may influence the investor.

Risk information

When a communication includes a description of risks and rewards in an equally prominent manner, it should refer to the risk classification in the KID/KIID and the relevant risks mentioned in the fund documents. It should furthermore mention where complete information can be found.

Cost information

Whenever a reference to costs associated with purchasing, holding, converting or selling units or shares is made, an explanation which allows investors to understand the overall impact of costs must be added. Should any costs be indicated in another currency than that of the Member State, the information should include a warning and the foreign currency should clearly be stated.


Any past performance which is disclosed must be consistent with legal documents such as prospectus, KID or KIID, cannot be the main information of the communication, must be based on historical data and include information on the reference period plus the source of the data. Several disclosure rules apply and the mention should be preceded by the following statement: “Past performance does not predict future returns”.

When a marketing communication include information of the future performance, this must be based on reasonable assumptions supported by objective data, be disclosed per fund and for a time horizon consistent with the recommended holding period. It should be preceded by the following statement:

“The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and/or current market conditions and are not an exact indicator. What you will get will vary depending on how the market performs and how long you keep the investment/product.”

A disclaimer is furthermore needed to indicate that future performance is subject to taxation which depends on the personal situation of each investor and which may change in the future and regarding the fact that investors may lose invested capital.

Closing remarks

Fund managers are informed in the guideline that the Regulation specifies the requirements for marketing communications and does not explicitly address the responsibility of funds managers for their content.

ESMA will have the guidelines translated into the official EU languages and subsequently published on their website. Once the translations published, national authorities will have to notify ESMA within two months to confirm whether they comply or intend to comply (with reasons for non-compliance) with the guidelines. Please note that in the absence of a response by this deadline, authorities will be considered as non-compliant. Six months after publication of the translations the guidelines will become applicable.

The final report is available here (PDF | 0.4MB).

Please feel free to contact us should you require any additional information.

Said Fihri

+352 22 51 51 7892

Stephanie Zedda

+352 22 51 51 7271