AIFMs: Marketing under increased regulatory focus

The Danish Financial Supervisory Authority (FSA) has published a thematic report on how managers of alternative investment funds and investment management companies market their investment funds. Overall, the report highlights significant compliance gaps in the marketing practices of Alternative Investment Fund Managers (AIFMs). The report places particular emphasis on two critical areas: i) internal procedures and ii) the presentation of information – particularly in relation to the PRIIP Regulation and the Cross-Border Distribution Regulation.

Based on the FSA’s investigations, the FSA found deficiencies in both internal controls and marketing practices across all inspected AIFMs. In several cases, benefits of potential investments were highlighted without adequate risk disclosure, and some materials overstated potential returns. In the report, the FSA summarizes what AIFMs should pay particular attention to in order to comply with the requirements for marketing investment products and services:

i) Procedures and controls

AIFMs are expected to implement clear, documented workflows governing the creation, approval, and review of all marketing communications. This includes that the AIFMs must have:

• Pre-approval processes in place, e.g. legal or compliance sign-off before distribution of marketing initiatives;
• Post-distribution controls, such as regular reviews of published material and consistency across platforms,
• Oversight of third-party marketing, including influencers and external content creators.

These procedures must be tailored to the AIFM’s marketing scope, product complexity, and target investor group. Weak or absent controls can increase the risk of disseminating misleading or imbalanced information.

ii) Presenting information: clarity, balance, and alignment with PRIIP KID and the cross-border regulation

Marketing materials must be unmistakably labelled as such and clearly identify the AIFM. Under both the PRIIP Regulation and the Cross-Border Distribution Regulation, communications must be fair, clear, and not misleading – regardless of whether the material is distributed cross-border or solely within Denmark.

Any mention of potential benefits must be accompanied by a proportional and prominent disclosure of risks – placed with equal visual weight and suited to the target audience. This applies across all distribution channels, including digital formats, third-party content, and social media.

If a product qualifies as a PRIIP (as most Danish Venture Funds and PE Funds do), any depiction of expected performance must mirror the moderate scenario in the PRIIP KID. Historical or projected performance must not override or obscure this – nor should materials imply higher returns than those stated in the KID.

Finally, risk disclosures must be tailored to the product’s complexity, and the overall presentation must reflect a balanced view – both key expectations under MiFID II and the cross-border regulation. AIFMs should ensure that all marketing content can stand up to regulatory scrutiny, whether aimed at Danish or EU-based retail investors.

 

Looking ahead: what AIFMs must consider

This report sends a clear regulatory signal: compliant marketing is a strategic responsibility, not a mere box-ticking exercise. AIFMs should therefore pay increased attention and, where necessary, reinforce:

• Governance frameworks around marketing approvals,
• The integration between marketing and compliance teams,
• Training and internal awareness of PRIIP and cross-border obligations,
• The risk of reputational damage from regulatory findings.

 

The update from Danish Financial Supervisory Authority (FSA) is available here and the thematic report can be read here.

Tags:  KID / PRIIPSMarketingThe Danish FSA