Denmark - New Executive Order on Marketing of Foreign UCITS and non-UCITS
With effect from 1 January 2013, a new Executive Order1 was signed into law in Denmark resulting in changes to the process for foreign UCITS and non-UCITS marketed in Denmark. Set out below is a summary of the key changes:
- The requirement to include Danish tax language for local investors in the prospectus or by way of (country) supplement to it has been removed.
NOTE: For any UCITS being marketed towards retail investors2 the prospectus must continue to include details of the Danish representative, such details can be included in the prospectus or by way of a separate (country) supplement for Danish investors.
- The requirement to provide a sworn Danish translation of the Key Investor Information Document (“KIID”) has been removed.
- There is a new requirement for the prospectus (or (country) supplement) to include a statement on whether the fund will target the general public in the home country, including a statement on whether retail investors will be targeted.
The Danish Financial Services Authority ("FSA") have also taken the opportunity to reiterate that they consider marketing towards retail investors at the umbrella (i.e. fund) level, and that it is therefore not possible to register some sub-funds for marketing towards retail investors and others for marketing towards professional investors only. Consequently, if one sub-fund or share class is directly or indirectly marketed towards retail investors, the UCITS must be registered for marketing towards retail investors, and the UCITS must have a representative for all sub-funds and share classes marketed in Denmark. Hence, an agreement with a Danish representative will only comply with Section 8 of the Executive Order if it includes all sub-funds and share classes registered for marketing in Denmark and the agreement with the representative must be consistent with the registration.
1Executive Order no. 1298 of 14 December 2012 on Marketing Carried Out by Foreign Investment Undertakings in Denmark ("Executive Order").
2Any investor who cannot be classified as a professional investor will be deemed a retail investor. Indirect marketing through unit-linked schemes is not considered marketing towards retail investors, however any other kind of resale or distribution to a retail investor through a professional investor or otherwise, is considered indirect marketing towards retail investors.