ESMA asks for support on reverse solicitation report

ESMA has written to the EU on reverse solicitation. The Commission had asked ESMA for its input on a report the Commission is to deliver on cross-border distribution of collective investment undertakings.  ESMA has been asked to ask national regulators for their views on use of reverse solicitation by asset managers and the impact on passporting activities.  As a result, ESMA circulated a questionnaire among regulators, but has received the disappointing response that barely any of them had any information at all to share. Only CONSOB reported that, in Italy, 25% of subscriptions in funds gathered by Italian asset managers (not distributors) were done on the basis of reverse solicitation, and were carried out 99% for professional investors. CySEC said that in Cyprus 30% of UCITS managers and 50% of AIFMs use reverse solicitation.  Many regulators said that they believe reverse solicitation is used to circumvent the rules of the third-country and EU passport regimes but had no data to back it up. ESMA feels it can do no more.

Emma Radmore