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UCITS passporting in Spain

Table of contents
  1.  EEA UCITS Schemes
  2. Fees*
Spain

1. EEA UCITS Schemes

The UCITS Directive is transposed into Spanish law mainly by means of Law 35/2003 of 4th November, on CIS (“CIS”) and developed by Royal Decree 1082/2012, of 13 July, approving the regulation of the CIS (“CIS Regulation”).

According to the CIS, EEA Management Companies may exercise passporting rights for the management and marketing of an EEA UCITS Scheme in Spain on a freedom of services and / or branch basis.

Notification

If an EEA Management Company wishes to manage and market an EEA UCITS Scheme to retail / professional investors located in Spain, a passporting process must be carried out. It is important to highlight that there is no private placement regime for EEA UCITS Schemes under CIS .

The passporting process is underlined by CIS Law, CIS Regulation and namely in Circular 2/2011, of the Spanish Securities Market Commission (Comisión Nacional del Mercado de Valores, “CNMV”) on foreign collective investment schemes registered at the CNMV.

The process will involve the HMSA sending the prescribed management passport notification to the CNMV on behalf of the EEA Management Company.

The EEA Management Company will have to send the following documents to accompany the notification;

  1. EEA UCITS Scheme’s rules or instrument of incorporation; 
  2. the prospectus;
  3. KIID (translated into Spanish); and
  4. any annual reports or biannual accounts, where applicable.

In particular, Part B of the notification shall include certain specific information set out in Circular 2/2011 of the CNMV, on foreign collective investment schemes registered at the CNMV.

Once the notification is reviewed, the CNMV will issue its confirmation of recognition to the HMSA, from which point the EEA Management Company will be able to market the EEA UCITS Scheme in Spain. No additional permissions are required.

An EEA Management Company proposing to market an EEA UCITS Scheme in Spain is obliged to treat Spanish investors under the same terms and conditions as home Member State investors and shall be required to maintain facilities in Spain to enable investors to obtain or inspect the documentation constituting the EEA UCITS Scheme. Details of these facilities must be included in the notification provided to the CNMV. The EEA UCITS Scheme’s prospectus must also disclose the address of such facilities.

The CIS defines “marketing” of fund interests as the advertising activity carried out on behalf of the collective investment institution or any other entity acting on its behalf or on behalf of any of its traders to solicit clients, so these clients contribute with funds, assets or rights. As stated above, marketing activity entails making offers at the initiative of the fund managers or on their behalf.

  1. Regulation (EU) 2019/1156 on facilitating cross-border distribution of collective investment undertakings, which is directly applicable in Spain, and 
  2. Directive (EU) 2019/1160 with regards to cross-border distribution of collective investment undertaking, transposed into Spanish law by means of the Royal Decree-Law 24/2021 without introducing any material amendment, 

introduced new rules relating to the cross-border marketing and distribution of collective investment undertakings within the EU, which include, among others, a “pre-marketing” definition. In accordance with that, “pre-marketing” in Spain means the provision of information or communication, direct or indirect, on investment strategies or investment ideas by a management company, or on its behalf, to potential investors domiciled or with a registered office in the European Union  in order to test their interest in a qualifying fund which is not yet established, or in a qualifying fund which is established, but not yet notified for marketing in the member State where the potential investors are domiciled or have their registered office, and which in each case does not amount to an offer or placement to the potential investor to invest in the units or shares of that qualifying fund.

Consequently, the management companies of UCITS need to submit a pre-marketing notification form to the CNMV prior to engaging in pre-marketing activities in Spain, and any subscription of an investor within 18 months of the fund interests shall be considered marketing to which the registration procedure applies.

Finally, it is important to note that the EEA UCITS Scheme must comply with all laws, regulations and administrative provisions in force in Spain which do not fall within the scope of the UCITS Directive.

2. Fees*

The CNMV does not charge an application fee for outward or inward EEA UCITS Scheme passport notifications. However, upon registration, EEA UCITS Schemes will have to pay a lump sum of EUR 1,040.60 and from the registration onwards, an annual flat fee for each of EUR 2,601.51 regardless of the expected commercialisation volume.

 

* Fee amounts subject to updates under each annual General State Budget.