The Autorité des Marchés Financiers has amended its doctrine to clarify its expectations of ELTIFs

Background

The ELTIF Regulation has been revised. A new version came into application on 10 January 2024. A French AIF that meets the new conditions of the ELTIF Regulation, in particular that it invests at least 55% in long-term assets, may apply to the AMF for authorisation. Once authorised, and subject to notification, the ELTIF may be marketed to retail investors in other European Union countries.

To help investment management companies that want to take advantage of the opportunities offered by the revised text by launching and managing ELTIF-authorised AIFs, the AMF has amended its instruction documents applicable to AIFs as regards the authorisation of such funds.

The amended doctrine documents, in red line, can be accessed from the "Find out more" section below.

Procedure for AIFs to apply for ELTIF authorisation

In its doctrine, the AMF stipulates that an AIF that complies with the conditions of the ELTIF Regulation may apply to the regulator for authorisation under this regulation by attaching to its application the  form available  on the AMF website.

When a retail general-purpose investment fund (FIVG), an alternative fund of funds (FFA), a professional general-purpose investment fund (FPVG), a retail private equity investment fund (FCPR), a retail venture capital investment fund (FCPI), a retail local investment fund (FIP), a real estate collective investment undertaking (OPCI), a professional real estate collective investment undertaking (OPPCI) or an employee savings scheme fund (FES) obtains authorisation under the ELTIF Regulation, AMF doctrine stipulates that it must inform its shareholders or unitholders of this by any means.

Procedure applicable in the event of a change occurring during the life of an AIF authorised under the ELTIF Regulation

After authorisation under the ELTIF Regulation, changes may occur during the life of the fund, whether these are linked to the requirements set out by the ELTIF Regulation (e.g. the redemption policy) or not (e.g. an extension to the life of the fund).

To protect the interests of retail investors, the AMF has amended its doctrine to make certain substantial changes that may occur during the life of an AIF subject to:

• prior authorisation by the AMF, shareholders or unitholders being specifically informed of the changes, and the possibility for them to exit free of charge when these changes affect an authorised AIF (i.e. a FIVG, FFA, FPVG, FCPR, FPCI, FIP, OPCI, OPPCI or FES); or
• prior notification to the AMF one month before the changes are implemented when they affect a declared AIF (i.e. an FPS, FPCI or OFS), an approved AIF (i.e. a real estate investment company [SCPI], a forestry investment company [SEF] or a forestry investment grouping [GFI]) or an "Other AIF" marketed to retail investors.

The AMF's new prior information procedure also forms part of a drive to better protect retail investors, regardless of the type of ELTIF fund in which they are likely to invest (whether an FCPR or an FPS, for example).

The AMF also specifies that an FCPR, a specialised professional fund (FPS), a professional private equity fund (FPCI) or a specialised financing vehicle (OFS) authorised under the ELTIF Regulation prior to 10 January 2024 that opts to be subject to the conditions laid down by the revised ELTIF Regulation must inform the AMF of this one month in advance. FCPRs that make this choice must also inform their unitholders by any means.