The marketing restriction
Part 6 of the Alternative Investment Fund Managers Regulations 2013 carries the definition; where the Handbook's description differs, the instrument governs.
An offering or placement means making a unit or share available for purchase as part of raising capital: both a contractual offer capable of acceptance and an invitation to make an offer to subscribe. Secondary trading falls outside it; listing is not itself an offering or placement (PERG 8.37.5G).
The investor is whoever will make the decision to invest: a nominee subscribing as bare trustee or a custodian subscribing for an underlying investor is looked through; a discretionary manager deciding without reference to its client is itself the investor (PERG 8.37.9G).
The restrictions in regulations 49 to 51 apply only to marketing in the UK, and only to investors domiciled or registered in the United Kingdom or Gibraltar. Domicile is construed as in AIFMD and may differ from tax domicile (PERG 8.37.10G). An investment firm may not market an AIF unless any condition regulation 49 or 50 puts on the AIFM is met.
Draft documentation and reverse solicitation
Regulation 47 disapplies regulations 49 to 51 for an offering or placement made at the investor's initiative. A confirmation from the investor normally suffices, provided it is obtained before the offer or placement takes place, and cannot be relied on where obtained to circumvent the requirements (PERG 8.37.11G). Regulation 47 does not define initiative.
Marketing routes and the notification conditions
| AIFM | AIF | Route |
|---|---|---|
| Full-scope UK AIFM | Not within regulation 57(1) | FCA approval under regulation 54, on the FUND 3 Annex 1 D form (FUND 3.12.2D) |
| Full-scope UK AIFM | Within regulation 57(1): broadly a non-UK AIF, or a UK feeder whose master is a non-UK AIF or has a non-UK AIFM | Private placement under regulation 57 |
| Small non-UK AIFM | Any AIF it manages | Private placement under regulation 58 |
| Above-threshold non-UK AIFM | A UK AIF or a non-UK AIF | Private placement under regulation 59 |
A UK feeder AIF can use the regulation 54 route only if its master is neither managed by a non-UK AIFM nor itself a non-UK AIF (FUND 3.12.3G). On the private placement side entitlement follows a complete notification rather than an approval: the AIFM may market once a notification containing all the required information is sent, unless the FCA suspends or revokes it (FUND 10.5.2G).
The notification confirms four conditions (FUND 10.5.4G): compliance with FUND, the Handbook rules that implemented AIFMD, and the AIFMD level 2 and UK regulations and BTS; that FUND 3.11 need not be complied with provided entities other than the AIFM carry out the duties in FUND 3.11.20R to 3.11.23R and 3.11.25R and the FCA is told who they are; cooperation arrangements for systemic risk oversight with the third country's authorities; and that the country where the non-UK AIF is established is not a Non-Cooperative Country and Territory listed by the Financial Action Task Force.
Financial promotion and retail investors
Clearing the marketing route does not clear the promotion restriction. Under regulation 46, a person entitled to market under regulation 49, 50 or 51 may do so to a retail client only without breaching section 21(1) or 238(1) of the Act, and an activity in those sections that is not Part 6 marketing stays subject to the restriction (PERG 8.37.14G). One exemption covers communications to professional clients approved by the FCA under regulation 49 or 50; it does not travel with a notification.
COBS 18.5A.11R adds thirteen items a full-scope UK AIFM must take reasonable steps to offer, and provide on request, when marketing an unauthorised AIF to retail clients. The DISC product summary duty turns on a different test: whether the AIF is a consumer composite investment made available to retail investors (FUND 10.5.13G, from 6 April 2026).
Proposed UK rules and EU distribution
There is no outbound route in UK law. Marketing in a member state runs on that state's implementation of the Directive's third country provisions, not read at source. Since the transition period ended, a third country includes an EEA country.
Proposed, not law
CP26/28 chapter 12 is continuity. The requirements stay in secondary legislation, so the FCA proposes guidance not rules (12.5). AIFMs that are neither UK nor Gibraltar AIFMs become third country AIFMs, and AIFs outside the UK or Gibraltar become third country AIFs (12.6). The conditions carry across, with an annual registration fee added (12.7). AIFMs authorised in Gibraltar keep the right to market the UK and Gibraltar AIFs they manage here under retained passporting, within the Gibraltar Access Regime (12.10).
EU law
Article 20(6a), inserted by Directive (EU) 2024/927 and applying from 16 April 2026, takes the marketing function outside the delegation regime where distributors act on their own behalf under MiFID or insurance-based investment products, irrespective of any distribution agreement. A distributor acting on behalf of the AIFM remains a delegate. From 16 April 2027, amended Article 24(2)(f) requires reporting of the Member States in which units are actually marketed.
Alongside this module
Where this subject is covered elsewhere in the course.