This chapter explains that in most international markets a mutual fund can only be promoted to the public by authorised persons. International and cross-border constraints and the different distribution channels (the ways of promoting and marketing) are discussed.
In most countries marketing of mutual funds to the general public is permitted, but only of funds that have been authorised or recognised by the jurisdiction, or by a federated or affiliated jurisdiction (see Chapter 3). Even so, it may be possible to promote unauthorised funds to professional and institutional investors, or to people no longer living in the country (expatriates).
The advent of the Internet has posed as much of a challenge to regulators as it has provided opportunities to fund management companies and their selling agents, but restraints on international marketing include:
Regulations usually require that a mutual fund be authorised before it can be promoted to the public. Authorisation procedures include the submission of the prospectus or scheme particulars, which must meet prescribed requirements of form and content. The investment objectives of the fund also have to comply with the domestic standards of the country into which the fund is to be marketed.
The prospectus or scheme particulars and other documentation will have to be provided in the principal language of the country in which it is to be ...