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. 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/.

CROSS-BORDER/ INTERNATIONAL MARKETING

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

FundsRegulations 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.

Language

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 marketed, and possibly other languages spoken widely in that country. As a separate matter, anti-discrimination legislation may well require that fund documents be available in large size type, in Braille or in audio format.

Advertisements

Advertisements and other promotional material must comply with local regulations and conduct of business rules. Local advertising standards and regulations in each country may differ from the ‘home state’ rules and require, for instance, that certain specific details are contained in (or excluded from) advertisements. It may also be necessary to demonstrate that compliance checks have been completed.

Investment traditions

Some countries’ investors may have a tradition of investing in a particular way, and be reluctant to change, whether to a new form or method of investing or to a new type of investment or to an investment managed by a’ foreigner’. In Germany, for instance, it is only recently that investors have begun to invest directly in equities, as distinct from bonds issued by banks who were the holders of direct equity.

These and many other restraints on international marketing can be overcome, or transformed into opportunities. Communication links around the world are improving all the time the Internet in particular is now used to promote mutual funds, and information about them is therefore accessible from almost anywhere. The standardisation of the form of the mutual fund, the gradual simplification of its structure and a clear presentation of investment objectives, risks and management charges are all contributing to a better understanding of the product, which in turn is leading more investors to choose mutual funds to meet their own personal investment objectives.

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Mutual Funds Info : Authorisation