AIFMD II and Distributors: Independence vs Control

Why It Matters

The clarification separates independent distribution from AIFM operational duties, lowering compliance risk while compelling managers to reassess control over third‑party marketing.

Key Takeaways

• AIFMD II excludes regulated distributors' marketing from delegation
• Independence requires distributor acting in its own name
• AIFMs must assess control levels in distribution agreements
• MiFID II product governance obligations remain unchanged
• Update documentation to reflect independent marketing status

Pulse Analysis

The European Union’s AIFMD II revision addresses a long‑standing ambiguity around third‑party marketing. Article 20(6a) explicitly removes marketing performed by distributors regulated under MiFID II or the Insurance Distribution Directive from the delegation framework, meaning that such activities are no longer automatically classified as delegated functions of the AIFM. This change provides legal certainty for fund managers and distributors, but it also shifts the regulatory focus from the existence of a contract to the substance of the relationship.

In practice, the key test becomes whether the distributor operates on its own behalf, decides how, when, and to whom the alternative investment fund is marketed, and fulfills its own suitability or appropriateness obligations. If the AIFM dictates marketing strategy, approves materials beyond legal checks, or controls client targeting, the arrangement may still be viewed as delegation. Consequently, firms must scrutinise existing distribution agreements for clauses that embed AIFM control, as such provisions could expose them to compliance breaches under the new regime.

To align with AIFMD II, managers should conduct a substance‑based review of all distribution relationships, tightening documentation to accurately reflect the independent nature of the marketer’s role. Updating contractual language, clarifying decision‑making authority, and ensuring distributors retain discretion are practical steps. By doing so, AIFMs can preserve the benefits of third‑party distribution while mitigating regulatory risk, positioning themselves for a smoother transition as the market adapts to the clarified independence‑versus‑control paradigm.