Publication of national provisions governing marketing requirements for UCITS

Issued: 29 July 2021

Last revision: 29 July 2021

In application of Article 1 of the Commission Implementing Regulation (EU) 2021/955, this page contains the information on the national laws, regulations and administrative provisions governing marketing requirements referred to in Article 5(1) of Regulation (EU) 2019/1156 of the European Parliament and of the Council of 20 June 2019 on facilitating cross-border distribution of collective investment undertakings.

Summary of Marketing Requirements for UCITS

1. Notification and prior approval of marketing communications

Without prejudice to Article 93 of the UCITS Directive, the Central Bank does not require notification or prior approval of marketing communications for UCITS.

2. Any other requirements for the marketing of UCITS that the competent authority considers appropriate

UCITS must ensure compliance with Regulation 116 of the UCITS Regulations, Regulation 54 and 97 of the Central Bank UCITS Regulations and the advertising standards set out in Schedule 6 of the Central Bank UCITS Regulations. 

When a UCITS ceases to market to investors in the State, it must comply with Regulation 97 of the Central Bank UCITS Regulations.

The UCITS, in marketing its units in Ireland to investors, shall comply with the Consumer Protection Code of the Central Bank.

Marketing requirements for UCITS

The UCITS Directive is implemented into Irish law by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 [S.I. No 352 of 2011] (as amended), (the “UCITS Regulations”). The Central Bank of Ireland (the “Central Bank”) is designated in the UCITS Regulations as the competent authority with responsibility for the authorisation and supervision of UCITS. The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2019 [S.I. No 230 of 2019] (the “Central Bank UCITS Regulations”) should be read in conjunction with the UCITS Regulations as the Central Bank UCITS Regulations contain requirements concerning the cross-border notification of UCITS. Links to the legislation relevant to the regulation of UCITS is available here.

While the term “marketing" is not defined in the UCITS Regulations nor in the Central Bank UCITS Regulations, it can be taken to mean a direct or indirect offering or placement of units or shares of a UCITS at the initiative of the UCITS or on behalf of the UCITS to or with investors domiciled or with a registered office in Ireland.

The format and content of marketing material, including the identification of the information and documents to be notified to the competent authority prior to the beginning of marketing

Set out below are requirements related to the contents, format and manner of presentation of marketing communications, including compulsory warnings and restrictions on the use of certain words or phrases.  The relevant UCITS must ensure compliance with Regulation 54 and 97 of the Central Bank UCITS Regulations and the advertising standards set out in Schedule 6 of the Central Bank UCITS Regulations.  Including that:

The name of a UCITS and its regulatory status should be shown clearly in any advertisement relating to that UCITS.

An advertisement relating to a UCITS shall not contain information which is false or misleading or presented in a manner that is deceptive.

An advertisement relating to a UCITS shall refer to the key investor information document and the prospectus issued by the relevant UCITS.

No advertisement relating to a UCITS shall be inconsistent with any relevant provision of the key investor information document or of the prospectus issued by the relevant UCITS.

(Reference: Regulation 54 of the Central Bank UCITS Regulations).

Moreover, a UCITS which is authorised in a Member State other than Ireland and is marketing its units in Ireland, or is authorised in Ireland and is marketing its units in Ireland or in a state that does not have any statutory regulation of marketing, shall comply with the advertising standards set out in Schedule 6 of the Central Bank UCITS Regulations.

These standards require that:

The design and presentation of an advertisement must be:

  1. clear, fair, accurate and not misleading; and
  2. such that the advertisement can be understood easily and clearly.

Where footnotes are used in an advertisement they should be of sufficient size and prominence to be legible easily; where appropriate they should be linked to the relevant part of the main copy.

It must be clear from the design and presentation of an advertisement that it is an advertisement such that any person who looks at it can see immediately that it is an advertisement.

No statement made or risk warning given in an advertisement may be obscured or disguised in any way, nor may the effect of any risk warning be diminished, by the content, design or format of the advertisement.

An advertisement must not, whether by inaccuracy, ambiguity, exaggeration, omission or otherwise, mislead investors about any matter that is likely to influence an investor’s attitude to the investment.

Every advertisement must be prepared with care and with the aim of ensuring that a potential investor understands fully the nature of any commitment into which the investor would enter if the investor were to acquire a unit in the relevant UCITS.

In preparing an advertisement, a UCITS shall take into account the fact that the complexities of finance may be beyond the understanding of some people to whom the opportunity being offered will appeal and therefore no advertisement may take advantage of inexperience or credulity.

When an advertisement contains a forecast or projection, such as a specific growth rate or a specific return or rate of return, it must make clear the basis upon which that forecast or projection is made, explaining, where relevant:

    1. whether reinvestment of income is assumed;
    2. whether account has been taken of the incidence of any taxes or duties and, if it has, how such account has been taken; and
    3. whether the forecast or projected rate of return will be subject to any deductions other than upon premature realisation or otherwise.

Advertisements leading to the employment of money in anything the value of which is not guaranteed must include a warning that the value of the investment can reduce as well as increase and, therefore, that the return on the investment necessarily will be variable.

An advertisement must not describe an investment as being guaranteed or partially guaranteed (or by words that convey such a meaning or impression) unless there is in place a legally enforceable agreement with a third party that undertakes:

    1. in the case of a full guarantee, to meet, in full, an investor’s claim under the guarantee; or
    2. in the case of a partial guarantee, to meet, to whatever extent is stated in the advertisement, the investor’s claim under the partial guarantee. Where values are guaranteed, sufficient detail must be included in the advertisement to give the reader a fair view of the nature of the guarantee.

An advertisement making claims, whether specific or not, as to anticipated growth in value or rate of return must include a prominent statement to the effect, as appropriate, that neither past experience nor the current situation are necessarily accurate guides to the future growth in value or rate of return.

An advertisement that contains information on past performance must also contain the following warning, presented in the advertisement no less prominently than the information on past performance: “Past performance may not be a reliable guide to future performance”.

An advertisement that quotes past experience in support of a forecast or projected growth in the value or rate of return:

    1. must not be misleading in relation to present prospects of an investment; and
    2. must indicate the circumstances in which, and the period over which, such experience has been gained, in a way that is fair and representative.

An advertisement relating to offers to facilitate the planned withdrawal from capital as an income equivalent, such as by cashing in units of the UCITS, must contain a statement explaining clearly the effect that any such withdrawal would have on the investment.

When claims to investment skill in an advertisement are based upon an asserted increase in the value of particular items purchased or recommended for purchase by the advertiser in the past, that person must be in a position to substantiate that:

    1. the purchase or recommendation upon which the assertion is based was made at the time claimed; and
    2. the present value asserted for the investment corresponds to the price actually obtained for identical items when sold in the open market in the period immediately preceding the advertisement. No claim to an increase in the value of investments or collectibles should be based upon the performance within a given market of selected items only unless that claim can be substantiated in accordance with paragraphs (a) and (b).

The terms “tax-free” and “tax-paid”, and words, terms or phrases creating a similar impression, may be used in an advertisement only if:

    1. it is made clear in the advertisement which particular tax or taxes or duty or duties are involved; and
    2. the advertiser states clearly what liability may arise and by whom it will be paid if it does arise.

When the achievement or maintenance of a return that is claimed or offered in an advertisement for a given investment is in any way dependent upon the assumed effects of tax or duty:

    1. this fact must be explained clearly; and
    2. the advertisement must make it clear that no undertaking is or can be given that the fiscal system may not be revised with consequent effects upon the return that is offered.

Where an advertisement relates to a high volatility UCITS it must state that the investment may be subject to sudden and large falls in value, and, if it is the case, that the investor could lose the total value of the initial investment.

Where a UCITS is described as being likely to yield income or as being suitable for an investor that is seeking income from the investment, and where the income from the UCITS can fluctuate, the advertisement must contain the following warning: “Income may fluctuate in accordance with market conditions and taxation arrangements”.

Where a UCITS is denominated in a currency other than that of the country in which the advertisement is issued, the advertisement must contain the following warning: “Changes in exchange rates may have an adverse effect on the value price or income of the product”.

An advertisement shall, where relevant:

    1. state that the difference at any one time between the sale and repurchase price of a unit in the UCITS means that the investment should be viewed as medium term to long term;
    2. refer to the impact of a redemption charge.

Verification of marketing communications by the competent authority

The Central Bank does not provide for the verification of UCITS marketing communications.

Reporting obligations in relation to marketing

The Central Bank’s regulatory framework does not contain any specific reporting obligations in relation to the marketing of UCITS.

Passporting regime

The prospectus of a UCITS that is authorised in another Member State and which markets its units in Ireland, shall provide the following information for Irish investors:

  1. details of the facilities agent and of the facilities that are being maintained; and
  2. relevant provisions of Irish tax laws.

(Reference: Regulation 97 of the Central Bank UCITS Regulations)

Requirements in relation to the facilities to be made available to unit-holders:

A UCITS which intends to market its units in the State shall make available in the State facilities to perform a number of tasks as set out in legislation.

(Reference: Regulation 116 of the UCITS Regulations). 

Notifications in accordance with Article 93(7) and (8) of the UCITS Directive may be sent to: UCITSinwardmarketing@centralbank.ie

De-notification of arrangements made for marketing

The Central Bank shall be promptly informed, in writing, where:

  • a UCITS that is authorised in another Member State and which markets its units in the State ceases such marketing to investors in the state; or
  • an umbrella UCITS ceases marketing of any sub-fund to investors in the State.

(Reference: Regulation 97 of the Central Bank UCITS Regulations).

Other rules governing marketing of UCITS applicable within Ireland

The UCITS, in marketing its units in Ireland to investors, shall comply with the Consumer Protection Code of the Central Bank.

Disclaimer: The Central Bank of Ireland has taken reasonable care to ensure that the information on the national provisions governing marketing requirements of UCITS in Ireland included on this webpage is up-to-date and complete. The Central Bank of Ireland is not responsible for maintaining external websites and shall not be liable for any error or omission on any external website to which hyperlinks are provided on this webpage.

Other requirements*

In addition to the provisions referred to above, which are set out specifically for the marketing of UCITS, there may be other legal provisions that may apply when marketing them in Ireland, although they are not specifically designed for the marketing of UCITS, depending on the individual situation of those involved in the marketing of shares or units of UCITS. Marketing in Ireland may trigger the application of other requirements, such as:

  • the ASIA Code of Standards for Advertising and Marketing Communications in Ireland;
  • the Broadcasting Act 2009;
  • the Competition and Consumer Protection Act 2014;
  • the Consumer Protection Act 2007;
  • the Copyright and Related Rights Act 2000;
  • the Data Protection Act 2018;
  • the Data Protection Acts 1988 and 2003;
  • the European Communities (Misleading Advertising) Regulations 1988;
  • the European Communities (Misleading and Comparative Marketing Communications) Regulations 2007;
  • the Patents Act 1992;
  • the Sale of Goods and Supply of Services Act 1980;
  • the Trademarks Act 1996.

Disclaimer: The foregoing is a non-exhaustive list of national law that could be applicable and the Central Bank of Ireland shall not be liable for any omission in that list. Supervision of the requirements deriving from these laws is not under the supervision of the Central Bank of Ireland. The applicability of these requirements, and any other legal requirements, should be assessed before marketing, or investing in a UCITS. Where uncertainty exists, those marketing, or investing in a UCITS should obtain independent advice as to the applicable requirements to their individual situation.