The directive contains complex regulations governing marketing and email marketing carried out by fund managers with interests in alternative investment funds (AIFs). In the UK, US and continental Europe these regulations will operate alongside and sometimes overlap with those of local jurisdictions regarding financial promotions, so it is essential that you take on board and understand the implications for you. 

Passive marketing 

The AIFMD does not restrict professional investors who wish to invest in AIFs on their own initiative. If the offer or placement is made at the initiative of the investor, in other words if there is 'reverse solicitation' or passive marketing, this activity is not to be classified as marketing. Confirmation from the investor that the offering or placement was made on his own initiative should normally be enough to demonstrate this, as long as the confirmation is obtained before the offer or placement takes place. 'Email marketing' will not be included in 'passive marketing' as it has by its nature an element of coercion. 

Draft documents 

Although the FCA believes that the sending of draft documents (including promotional presentations or 'pathfinder' versions of private placement memoranda) is not marketing, it has 'held fire' on this subject until the EU provides guidance. This only affects draft documents and does not include approved documents such as factsheets, weekly and monthly net asset values (NAVs) or promotional material. 

Listing 

The listing of an AIF is not in itself considered marketing, but the activity undertaken that leads to a listing may be.

Invitation to offer

An invitation to an investor to make an offer to subscribe for the investment will be treated as an offer. This includes indirect offers, situations in which the manager distributes units of or shares in or information about an AIF through an intermediary or directly or via email marketing. 

Permission and confirmation

Fund managers need to be fully compliant with the AIFMD to manage and market AIFs. What this means to asset managers and hedge fund managers is that for any email activity the recipients - which could be family offices, sophisticated investors or pension funds - must have 'opted in' to the mailing list and must have given express permission and confirmation to receive documents. These documents may include information related to offers and placements. Your confirmation data also needs to be auditable - this means that you have to keep email records of these conversations. If someone says 'yes' to an offer, the evidence must be there for the regulators to see.

Paul Das is a director at ProFundCom, which has set up an AIFMD Manager on its AppStore. He can be reached on +44 (0)20 7060 2146.