Provisional text

JUDGMENT OF THE COURT (First Chamber)

20 October 2022 (*)

( Reference for a preliminary ruling – Approximation of laws – Directive 2009/65/EC – Undertakings for collective investment in transferable securities (UCITS) – UCITS management companies – Obligations concerning information to be provided to investors – Article 72 – Obligation to update the ‘essential elements of the prospectus’ – Scope – Article 69(2) – Information referred to in Schedule A of Annex I – Composition of a body of the management company – Article 99a(r) – Transposition into national law – National legislation extending the situations in which an infringement relating to the updating of the prospectus may be established and penalised )

In Case C‐473/20,

REQUEST for a preliminary ruling under Article 267 TFEU from the Sofiyski Rayonen sad (Sofia District Court, Bulgaria), made by decision of 17 September 2020, received at the Court on 30 September 2020, in the proceedings

**‘Invest Fund Management’ AD**

v

**Komisia za finansov nadzor**

THE COURT (First Chamber),

composed of A. Arabadjiev, President of the Chamber, L. Bay Larsen, Vice-President of the Court, acting as Judge of the First Chamber, P.G. Xuereb, A. Kumin and I. Ziemele (Rapporteur), Judges,

Advocate General: A.M. Collins,

Registrar: M. Siekierzyńska, Administrator,

having regard to the written procedure and further to the hearing on 26 January 2022,

after considering the observations submitted on behalf of:

–        ‘Invest Fund Management’ AD, by I. Antov, S. Dobrev, I. Georgiev, B. Karadzhov, M. Mitkova, T. Nacheva, S. Nedev, B. Teknedzhiev and V. Tokushev, аdvokati,

–        the Komisia za finansov nadzor, by B. Gercheva, A. Giorchev, L. Valchovska and M. Vasileva,

–        the German Government, by J. Möller and S. Heimerl, acting as Agents,

–        the Italian Government, by G. Palmieri, acting as Agent, and F. Meloncelli, avvocato dello Stato,

–        the Luxembourg Government, by A. Germeaux and T. Uri, acting as Agents,

–        the Polish Government, by B. Majczyna, acting as Agent,

–        the European Commission, by C. Auvret, C. Georgieva, J. Rius Riu and H. Tserepa-Lacombe, acting as Agents,

–        the European Securities and Markets Authority (ESMA), by F. Barzanti, G. Filippa and R. Vasileva Hoff, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 31 March 2022,

gives the following

**Judgment**

1        This request for a preliminary ruling concerns the interpretation of Article 69(2), Article 72 and Article 99a(r) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ 2009 L 302, p. 32), as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 (OJ 2014 L 257, p. 186) (‘Directive 2009/65’).

2        The request was made in the course of proceedings between ‘Invest Fund Management’ AD (‘IFM’) and the Komisia za finansov nadzor (Financial Supervision Commission, Bulgaria; ‘the FSC’) concerning a financial penalty imposed on IFM for failure to comply with the obligation to update the prospectus relating to an undertaking for collective investment in transferable securities (UCITS) which it manages.

*EU law*

3        Recitals 3, 4, 15, 58, 59, 61 and 69 of Directive 2009/65 state:

‘(3)      National laws governing collective investment undertakings should be coordinated with a view to approximating the conditions of competition between those undertakings at Community level, while at the same time ensuring more effective and more uniform protection for unit-holders. Such coordination facilitates the removal of the restrictions on the free movement of units of UCITS in the Community.

(4)      Having regard to those objectives, it is desirable to provide for common basic rules for the authorisation, supervision, structure and activities of UCITS established in the Member States and the information that they are required to publish.

...

(15)      A home Member State should be able, as a general rule, to establish rules stricter than those laid down in this Directive, in particular as regards authorisation conditions, prudential requirements and the rules on reporting and the prospectus.

...

(58)      Member States should make a clear distinction between marketing communications and obligatory investor disclosures provided for under this Directive. Obligatory investor disclosure includes key investor information, the prospectus and annual and half-yearly reports.

(59)      Key investor information should be provided as a specific document to investors, free of charge, in good time before the subscription of the UCITS, in order to help them to reach informed investment decisions. Such key investor information should contain only the essential elements for making such decisions. The nature of the information to be found in the key investor information should be fully harmonised so as to ensure adequate investor protection and comparability. Key investor information should be presented in a short format. A single document of limited length presenting the information in a specified sequence is the most appropriate manner in which to achieve the clarity and simplicity of presentation that is required by retail investors, and should allow for useful comparisons, notably of costs and risk profile, relevant to the investment decision.

...

(61)      Key investor information should be produced for all UCITS. Management companies or, where applicable, investment companies should provide key investor information to the relevant entities, in accordance with the distribution method used (direct sales or intermediated sales). ...

...

(69)      It is necessary to enhance convergence of powers at the disposal of competent authorities so as to bring about the equal enforcement of this Directive throughout the Member States. A common minimum set of powers, consistent with those conferred upon competent authorities by other Community financial services legislation should guarantee supervisory effectiveness. In addition, Member States should lay down rules on penalties, which may include criminal or administrative penalties, and administrative measures, applicable to infringements of this Directive. Member States should also take the measures necessary to ensure that those penalties are enforced.’

4        Article 1(7) of that directive provides:

‘Without prejudice to this Chapter, a Member State may apply to UCITS established within its territory requirements which are stricter than or additional to those laid down in this Directive, provided that they are of general application and do not conflict with the provisions of this Directive.’

5        Article 2(1)(b) and (s) of that directive is worded as follows:

‘For the purposes of this Directive the following definitions apply:

...

(b)      “management company” means a company, the regular business of which is the management of UCITS in the form of common funds or of investment companies (collective portfolio management of UCITS);

...

(s)      “management body” means the body with ultimate decision-making authority in a management company, investment company or depositary, comprising the supervisory and the managerial functions, or only the managerial function if the two functions are separated. Where, according to national law, the management company, investment company or depositary has in place different bodies with specific functions, the requirements laid down in this Directive directed at the management body or at the management body in its supervisory function shall also, or shall instead, apply to those members of other bodies of the management company, investment company or depositary to whom the applicable national law assigns the respective responsibility;

...’

6        Article 68(1)(a) of the same directive provides:

‘An investment company and, for each of the common funds it manages, a management company, shall publish the following:

(a)      a prospectus’.

7        Article 69(1) and (2) of Directive 2009/65 reads as follows:

‘1.      The prospectus shall include the information necessary for investors to be able to make an informed judgement of the investment proposed to them, and, in particular, of the risks attached thereto.

The prospectus shall include, independent of the instruments invested in, a clear and easily understandable explanation of the fund’s risk profile.

The prospectus shall include either:

(a)      the details of the up-to-date remuneration policy, including, but not limited to, a description of how remuneration and benefits are calculated, the identities of persons responsible for awarding the remuneration and benefits including the composition of the remuneration committee, where such a committee exists; or

(b)      a summary of the remuneration policy and a statement to the effect that the details of the up-to-date remuneration policy, including, but not limited to, a description of how remuneration and benefits are calculated, the identity of persons responsible for awarding the remuneration and benefits, including the composition of the remuneration committee where such a committee exists, are available by means of a website – including a reference to that website – and that a paper copy will be made available free of charge upon request.

2.      The prospectus shall contain at least the information provided for in Schedule A of Annex I, in so far as that information does not already appear in the fund rules or instruments of incorporation annexed to the prospectus in accordance with Article 71(1).’

8        Article 71 of that directive provides:

‘1.      The fund rules or instruments of incorporation of an investment company shall form an integral part of the prospectus and shall be annexed thereto.

2.      The documents referred to in paragraph 1 are not, however, required to be annexed to the prospectus provided that the investor is informed that, on request, he or she will be sent those documents or be apprised of the place where, in each Member State in which the units are marketed, he or she may consult them.’

9        In accordance with Article 72 of that directive:

‘The essential elements of the prospectus shall be kept up to date.’

10      Article 74 of that directive provides:

‘UCITS shall send their prospectus and any amendments thereto, as well as their annual and half-yearly reports, to the competent authorities of the UCITS home Member State. UCITS shall provide that documentation to the competent authorities of the management company’s home Member State on request.’

11      Article 75(1) and (2) of Directive 2009/65 provides:

‘1.      The prospectus and the latest published annual and half-yearly reports shall be provided to investors on request and free of charge.

2.      The prospectus may be provided in a durable medium or by means of a website. A paper copy shall be delivered to the investors on request and free of charge.’

12      In accordance with Article 78(1) to (3) and (5) of that directive:

‘1.      Member States shall require that an investment company and, for each of the common funds it manages, a management company draw up a short document containing key information for investors. That document shall be referred to as “key investor information” in this Directive. The words “key investor information” shall be clearly stated in that document, in one of the languages referred to in Article 94(1)(b).

2.      Key investor information shall include appropriate information about the essential characteristics of the UCITS concerned, which is to be provided to investors so that they are reasonably able to understand the nature and the risks of the investment product that is being offered to them and, consequently, to take investment decisions on an informed basis.

3.      Key investor information shall provide information on the following essential elements in respect of the UCITS concerned:

(a)      identification of the UCITS and of the competent authority of the UCITS;

(b)      a short description of its investment objectives and investment policy;

(c)      past-performance presentation or, where relevant, performance scenarios;

(d)      costs and associated charges; and

(e)      risk/reward profile of the investment, including appropriate guidance and warnings in relation to the risks associated with investments in the relevant UCITS.

Those essential elements shall be comprehensible to the investor without any reference to other documents.

...

5.      Key investor information shall be written in a concise manner and in non-technical language. It shall be drawn up in a common format, allowing for comparison, and shall be presented in a way that is likely to be understood by retail investors.’

13      Article 79(1) of that directive provides:

‘Key investor information shall constitute pre-contractual information. It shall be fair, clear and not misleading. It shall be consistent with the relevant parts of the prospectus.’

14      Article 82 of the same directive provides:

‘1.      UCITS shall send their key investor information and any amendments thereto, to the competent authorities of their home Member State.

2.      The essential elements of key investor information shall be kept up to date.’

15      Article 99(1), first and third subparagraphs, and (6) of Directive 2009/65 reads as follows:

‘1.      Without prejudice to the supervisory powers of competent authorities referred to in Article 98 and the right of Member States to provide for and impose criminal sanctions, Member States shall lay down rules on administrative sanctions and other administrative measures to be imposed on companies and persons in respect of infringements of national provisions transposing this Directive and shall take all measures necessary to ensure that they are implemented.

...

Administrative sanctions and other administrative measures shall be effective, proportionate and dissuasive.

...

6.      In accordance with national law, Member States shall ensure that, in all cases referred to in paragraph 1, the administrative penalties and other administrative measures that may be applied include at least the following:

...

(e)      in the case of a legal person, maximum administrative pecuniary sanctions of at least EUR 5 000 000 or, in the Member States whose currency is not the euro, the corresponding value in the national currency on 17 September 2014, or 10% of the total annual turnover of the legal person according to the last available accounts approved by the management body; ...

...

(g)      as an alternative to points (e) and (f), maximum administrative pecuniary sanctions of at least twice the amount of the benefit derived from the infringement where that benefit can be determined, even if that exceeds the maximum amounts in points (e) and (f)’.

16      Article 99a of that directive provides:

‘Member States shall ensure that their laws, regulations or administrative provisions transposing this Directive provide for penalties, in particular when:

...

(r)      an investment company or, for each of the common funds that it manages, a management company, repeatedly fails to comply with obligations concerning information to be provided to investors imposed in accordance with the national provisions transposing Articles 68 to 82;

...’

17      Annex I to that directive contains two schedules, A and B. Schedule A consists of a table divided into three columns the second of which is worded as follows:

‘1.      Information concerning the management company including an indication whether the management company is established in a Member State other than the UCITS home Member State[.]

...

1.8.      Names and positions in the company of the members of the administrative, management and supervisory bodies. Details of their main activities outside the company where these are of significance with respect to that company.

...’

*Bulgarian law*

18      Article 1 of the Zakon za deynostta na kolektivnite investitsionni shemi i na drugi predpriyatiya za kolektivno investirane (Law on collective investment schemes and other collective investment undertakings, DV No 77) of 4 October 2011, in the version applicable to the dispute in the main proceedings (‘the ZDKISDPKI’), provides:

‘This Law regulates:

1.      the activity of collective investment schemes and management companies;

2.      the activities of other collective investment undertakings;

...’

19      Article 56(1) of the ZDKISDPKI provides that, in the event of any change to the essential elements included in the prospectus of the collective investment scheme, that prospectus is to be updated within 14 days and submitted to the FSC within the same period.

20      Article 273 of that law is worded as follows:

‘(1)      Whoever commits or permits an infringement of:

...

10.      ... Article 56(1) [of the present law] shall be liable to a fine of 4 000 to 5 000 000 [leva (BGN)] [(approximately EUR 2 000 to EUR 2 500 000)];

...

(5)      For infringements under paragraph 1 committed by legal persons or sole traders a financial penalty shall be imposed as follows:

...

10.      for infringements referred to in point 10 of paragraph 1 – of BGN 10 000 to BGN 5 000 000 [(approximately EUR 5 000 to EUR 2 500 000)], and in the event of repeated infringement – of BGN 20 000 to BGN 10 000 000 [(approximately EUR 10 000 to EUR 5 000 000)].’

**The dispute in the main proceedings and the questions referred for a preliminary ruling**

21      IFM is a public limited company incorporated under Bulgarian law whose registered office is in Sofia (Bulgaria) which is authorised to carry on the business of a management company within the meaning of Article 2(1)(b) of Directive 2009/65 and which is entered in the register held by the FSC. IFM organises and manages five separate UCITS.

22      During a review, FSC officials found that the composition of IFM’s board of directors, as recorded in the Bulgarian trade register, had been modified on 28 August 2019 by the inclusion of two new non-executive members, to whom no management functions were delegated, within IFM’s board of directors.

23      The FSC officials took the view that IFM should have updated the prospectuses for each of the five UCITS which that company manages within the statutory period of 14 days and by 11 September 2019 at the latest. As the prospectuses were updated on 17 October 2019, the FSC, by means of five separate decisions, imposed administrative sanctions on IFM, thus five financial penalties each in the amount of BGN 10 000 (approximately EUR 5 000).

24      IFM challenged those decisions before the referring court. The main proceedings concern one of those five actions. IFM submits, first, that information relating to the change in the composition of the board of directors of a management company does not constitute ‘essential elements’ within the meaning of Article 56(1) of the ZDKISDPKI, requiring an update, within the prescribed period, of the prospectuses for the UCITS in so far as the newly elected members of the board of directors are non-executive members and do not carry out any managerial functions and, second, that the five financial penalties were imposed on it unlawfully since there was, in any event, only one infringement.

25      The FSC submits, for its part, that any change in the composition of the board of directors of a management company is a change to ‘essential elements’ since this forms part of the minimum content required in the prospectus, which makes the updating of those elements mandatory. Moreover, it states that the five separate financial penalties were not imposed unlawfully in view of the fact that an omission was established for each of the five UCITS managed by IFM.

26      In those circumstances, the Sofiyski Rayonen sad (Sofia District Court, Bulgaria) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      What meaning did the EU legislature intend to give to the term “essential elements” of the prospectus within the meaning of Article 72 of Directive [2009/65]?

(2)      Is Article 69(2) of Directive [2009/65] to be interpreted as meaning that any change to the minimum information in prospectuses provided for in Schedule A of Annex I is always covered by the term “essential elements” within the meaning of Article 72 of the Directive, so that these must be updated in due time?

(3)      If Question 2 is answered in the negative, is it to be assumed that information about a change in the composition of the board of directors of a particular management company that concerns non-executive members who are not assigned any management functions is included in the term “essential elements” within the meaning of Article 72 of Directive [2009/65]?

(4)      Is Article 99а(r) of Directive [2009/65] to be interpreted as meaning that it is only permissible to impose a penalty on a management company (for each of the investment funds managed by it) in the event of repeated non-compliance with obligations concerning information to be provided to investors imposed in accordance with the national provisions transposing Articles 68 to 82 of Directive [2009/65]?’

**The questions referred for a preliminary ruling**

*The first and second questions*

27      By its first and second questions, which must be examined together, the referring court asks, in essence, whether Article 72 of Directive 2009/65 must be interpreted as meaning that the information concerning a management company, provided for in Schedule A of Annex I to that directive, which the prospectus must contain as a minimum, under Article 69(2) thereof, falls within the definition of ‘essential elements of the prospectus’ within the meaning of Article 72 of that directive, with the result that it must be kept up to date.

28      It must be observed at the outset that Directive 2009/65 does not contain a definition of ‘essential elements of the prospectus’.

29      In that regard, it must be observed that the terms of a provision of EU law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union (judgment of 22 June 2021, *Latvijas Republikas Saeima (Penalty points)*, C‐439/19, EU:C:2021:504, paragraph 81 and the case-law cited).

30      In the present case, Directive 2009/65 does not contain any reference to national laws regarding the scope of ‘essential elements of the prospectus’ within the meaning of Article 72 thereof, with the result that that concept should have an autonomous and uniform interpretation throughout the European Union, particularly since, as the Advocate General observed in point 31 of his Opinion, it follows from recital 3 of Directive 2009/65 that the latter seeks to coordinate national laws governing collective investment undertakings with a view to, first, approximating, in the European Union, the conditions of competition between those undertakings and, second, ensuring more effective and more uniform protection for investors.

31      Moreover, since, as is clear from paragraph 28 of the present judgment, the definition of ‘essential elements of the prospectus’ is not defined by Directive 2009/65, it must be interpreted in accordance with the usual meaning of their words in everyday language, whilst also taking into account the legislative context in which they occur and the purposes of the rules of which they are part (judgment of 28 October 2021, *Magistrat der Stadt Wien (Grand Hamster – II)*, C‐357/20, EU:C:2021:881, paragraph 46 and the case-law cited).

32      As regards, first of all, the usual meaning in everyday language of the term ‘essential’, it should be noted that that adjective designates an element which is indispensable, as opposed to an ancillary or secondary element.

33      Elements that are indispensable in order for the document to fulfil its function must therefore be regarded as essential elements of the prospectus.

34      Second, as regards the background to Article 72 of Directive 2009/65, it must be observed that that provision is in Section 1, entitled ‘Publication of a prospectus and periodical reports’, of Chapter IX of Directive 2009/65, on obligations concerning information to be provided to investors, and that it directly follows provisions that set out the information to be included in a prospectus, in particular, Article 69(1) and (2) thereof, as noted by the Advocate General in point 33 of his Opinion.

35      In particular, it must be recalled, first of all, that the first and second subparagraphs of Article 69(1) of that directive provide that the prospectus must include the information necessary for investors to be able to make an informed judgement of the investment proposed to them, and, in particular, of the risks attached thereto, and that the prospectus must include, irrespective of the instruments invested in, a clear and easily understandable explanation of the fund’s risk profile.

36      Next, in accordance with the third subparagraph of Article 69(1) of Directive 2009/65, the prospectus must include a certain amount of information on the remuneration policy.

37      Thus, it follows from a combined reading of Article 69(1) of Directive 2009/65 and of Article 72 thereof, that the elements of the prospectus which are indispensable for investors to be able to make an informed judgement of the investment proposed to them, and, in particular, of the risks attached thereto, are ‘essential’ within the meaning of the latter provision.

38      Finally, Article 69(2) of Directive 2009/65 provides that the prospectus must contain at least the information provided for in Schedule A of Annex I thereto, in so far as that information does not already appear in the fund rules or instruments of incorporation annexed to the prospectus in accordance with Article 71(1) of that directive. That includes information concerning the common fund, the management company and the investment company, as well as information concerning the depositary, information concerning the advisory firms or external investment advisers, information concerning the arrangements for making payments to unit-holders, repurchasing or redeeming units and making available information concerning the UCITS, and certain other investment and economic information.

39      As the Advocate General observed in points 34 and 36 of his Opinion, the use of the words ‘at least’ within that provision demonstrates the legislature’s intention that the information to which Schedule A of Annex I to Directive 2009/65 refers are the minimum pieces of information that the prospectus must contain, which include, in accordance with point 1.8 of that schedule, the names and positions in the company of the members of the administrative, management and supervisory bodies, as well as details of their main activities outside the company where those are of significance with respect to that company.

40      Since the elements listed in Schedule A were thus considered by the EU legislature to be indispensable in order for the prospectus to fulfil its function of enabling investors to make an informed judgement of the investment proposed to them, it must be held that they fall within the scope of ‘essential elements of the prospectus’ within the meaning of Article 72 of Directive 2009/65.

41      It must also be observed that the EU legislature did not establish a hierarchy between those pieces of essential information, either on the basis of its importance for the investor or on the basis of another criterion.

42      Therefore, to take the view, as has been suggested in essence by IFM and the German, Luxembourg and Polish Governments in their written observations, that only some of those indispensable elements, such as elements which are capable of significantly affecting the economic interests of investors or influencing their investment decisions, or even those which are particularly important for investors in order to assess the risk inherent in the investments proposed to them, are ‘essential’, within the meaning of Article 72 of Directive 2009/65, would run counter to the choice made by the EU legislature to confer on all the elements referred to in Article 69(2) of Directive 2009/65 a mandatory character of equal value.

43      Third, as regards the objectives pursued by Directive 2009/65, it follows from recitals 3 and 4 thereof that, with a view to facilitating the removal of the restrictions on the free movement of units of UCITS within the European Union, that directive seeks to coordinate national laws governing such undertakings so as to, first, approximate in the European Union the conditions of competition between those undertakings and, secondly, ensure more effective and more uniform protection for unit-holders. Having regard to those objectives, that directive lays down common basic rules for the authorisation, supervision, structure and activities of UCITS and the information that they are required to publish.

44      First of all, there is no doubt that the prompt updating, following changes thereto, of the information the inclusion of which in the prospectus or in the documents forming an integral part thereof is essential, meets the objective of protecting investors, since such mandatory updating assures them that the information contained in that prospectus is reliable.

45      Such an interpretation is also compatible with the objective, as recalled in paragraph 43 of the present judgment, of facilitating the removal of the restrictions on the free movement of units of UCITS and of approximating, in the European Union, the conditions of competition between those undertakings. The obligation to update information the inclusion of which in the prospectus is essential, which applies uniformly to UCITS and management companies, irrespective of their Member State of origin or establishment, contributes to removing restrictions and approximating the conditions of competition between such undertakings.

46      The findings set out in paragraph 40 of the present judgment cannot be called into question by the arguments put forward by the German Government in its written observations, supported in that regard at the hearing before the Court by IFM and the Luxembourg Government, according to which, in essence, the scope of Article 72 should be determined by taking account of Article 78 of Directive 2009/65, relating to the document entitled ‘key investor information’, that investment and management companies are required to draw up, in such a way that only the elements referred to in Article 78 thereof should be regarded as ‘essential elements’ within the meaning of Article 72 of Directive 2009/65.

47      In that regard, it is important to note that Article 78(2) and (3) of Directive 2009/65 specifies the type of information that must be regarded as ‘key investor information’, namely appropriate information about the essential characteristics of the UCITS concerned while Article 78(3) also lists a certain amount of information that is classified as ‘essential elements in respect of the UCITS concerned’ which must, on that basis, be included in the document referred to in that provision. Article 72 of Directive 2009/65 relates to the essential elements not of the UCITS concerned but of the prospectus. As the Advocate General noted in point 41 of his Opinion, Articles 72 and 78 of Directive 2009/65 do not use the same term.

48      Furthermore, while Articles 69, 72 and 78 of Directive 2009/65 are in Chapter IX of that directive, the first two articles form part of Section 1 of that chapter, entitled ‘Publication of a prospectus and periodical reports’, whereas Article 78 of that directive is in Section 3 of that chapter, entitled ‘Key investor information’. Section 3 contains provisions relating to the document containing that information, including Article 82 of Directive 2009/65 which concludes Section 3 by laying down an obligation to keep up to date the essential elements of key investor information.

49      There is therefore a parallel between Articles 72 and 82 of Directive 2009/65 which each set out, in a very distinct manner, an obligation to update the prospectus, on the one hand, and key investor information, on the other.

50      As the Advocate General noted in point 42 of his Opinion, the scope of the information imparted by those two documents is different, the ‘key investor information’ having been designed as a very short document containing standardised content, provided free of charge, in good time, before the subscription of all UCITS, as is clear from recitals 59 and 61 of Directive 2009/65, with a view to facilitating the comparison of different investment proposals, notably by retail investors, as is apparent from Article 78(5) thereof. The prospectus, however, is aimed at all types of investors and contains more detailed and comprehensive information.

51      It follows that an interpretation of Article 72 of Directive 2009/65 in the sense that only the essential elements relating to the UCITS concerned, within the meaning of Article 78(2) and (3) of Directive 2009/65, constitute the essential elements of the prospectus would amount to assimilating two separate documents, namely, on the one hand, the ‘key investor information’ and, on the other, the prospectus.

52      In the light of the foregoing considerations, the answer to the first and second questions is that Article 72 of Directive 2009/65 must be interpreted as meaning that the information concerning a management company, provided for in Schedule A of Annex I to that directive, which the prospectus must contain as a minimum, under Article 69(2) thereof, falls within the definition of ‘essential elements of the prospectus’ within the meaning of Article 72 of that directive, with the result that it must be kept up to date.

*The third question*

53      In view of the answer to the first and second questions, there is no need to answer the third question.

*The fourth question*

54      By its fourth question, the referring court asks, in essence, whether Article 99a(r) of Directive 2009/65 must be interpreted as precluding national legislation under which a management company that has failed to comply, within the period prescribed by that national legislation, with the obligation to update the prospectus, provided for in Articles 68 to 82 thereof, with regard to several UCITS, is liable to an administrative penalty in respect of each of those undertakings, even though the amendment which had to be updated in those prospectuses concerned a single element relating to the composition of a body of the management company.

55      In that regard, it must be observed, in the first place, that Article 99a(r) of Directive 2009/65 provides that Member States are to ensure that their laws, regulations or administrative provisions transposing that directive provide for penalties, in particular when an investment company or, for each of the common funds that it manages, a management company, repeatedly fails to comply with obligations concerning information to be provided to investors imposed in accordance with the national provisions transposing Articles 68 to 82 thereof.

56      Thus, is it clear from the wording of that provision and, especially, the use of the words ‘in particular’, that, while Member States are obliged to provide for penalties in respect of the conduct referred to in Article 99a(r) of that directive, that provision in no way prohibits them from penalising other conduct.

57      In the second place, such an interpretation is confirmed by the context of that provision. It should be noted that, in accordance with the first subparagraph of Article 99(1) of Directive 2009/65, read together with recital 69 thereof, Member States are required, without prejudice to their right to impose criminal penalties, first, to lay down rules on administrative sanctions and other administrative measures to be imposed on companies and persons in respect of infringements of national provisions transposing that directive into national law and, second, to take all measures necessary to ensure that they are implemented.

58      Moreover, it follows from Article 1(7) of that directive, read in the light of recital 15 thereof, that Member States may establish rules stricter than those laid down in that directive, in particular as regards the rules on reporting and the prospectus, provided that they are of general application and do not conflict with the provisions thereof.

59      Therefore, as the Advocate General stated in point 56 of his Opinion, Directive 2009/65 does not fully harmonise the laws of the Member States, with the result that the Member States may choose penalties that seem to them to be appropriate.

60      It follows that Member States may introduce penalties for infringements of the legislation transposing Directive 2009/65 into national law which consist of conduct other than that referred to, inter alia, in Article 99a(r) thereof, and those penalties may also be stricter than those provided for by Directive 2009/65.

61      However, it is important to point out that it follows from the third subparagraph of Article 99(1) of Directive 2009/65 that administrative sanctions must be effective, proportionate and dissuasive.

62      The literal interpretation of Article 99a(r) of Directive 2009/65, as is apparent from paragraph 56 of the present judgment, is also consistent with the objectives pursued by that directive, set out in recital 3 thereof, namely, inter alia, to ensure more effective and more uniform protection for unit-holders and, therefore, to facilitate the removal of the restrictions on the free movement of units of UCITS in the European Union.

63      It follows that national legislation may provide that, in the event of a single instance of non-compliance with obligations concerning information to be provided to investors imposed in accordance with national provisions transposing Articles 68 to 82 of that directive, administrative penalties may be imposed on a management company for each of the investment funds managed by it, provided that those penalties are effective, proportionate and dissuasive.

64      Consequently, the answer to the fourth question is that Article 99a(r) of Directive 2009/65 must be interpreted as not precluding national legislation under which a management company that has failed to comply, within the period prescribed by that national legislation, with the obligation to update the prospectus, provided for in Articles 68 to 82 of that directive, in respect of several UCITS, is liable to an administrative penalty in respect of each of those undertakings, even though the amendment which had to be updated in those prospectuses concerned a single element relating to the composition of a body of the management company, provided that the administrative penalty, while being effective and dissuasive, is proportionate.

**Costs**

65      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (First Chamber) hereby rules:

1.      **Article 72 of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities, as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014,**

**must be interpreted as meaning that the information concerning a management company, provided for in Schedule A of Annex I to that directive, which the prospectus must contain as a minimum, under Article 69(2) thereof, falls within the definition of ‘essential elements of the prospectus’ within the meaning of Article 72 of that directive, with the result that it must be kept up to date.**

2.      **Article 99a(r) of Directive 2009/65, as amended by Directive 2014/91,**

**must be interpreted as meaning that it does not preclude national legislation under which a management company that has failed to comply, within the period prescribed by that national legislation, with the obligation to update the prospectus, provided for in Articles 68 to 82 of that directive, in respect of several undertakings for collective investment in transferable securities, is liable to an administrative penalty in respect of each of those undertakings, even though the amendment which had to be updated in those prospectuses concerned a single element relating to the composition of a body of the management company, provided that the administrative penalty, while being effective and dissuasive, is proportionate.**

[Signatures]

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*      Language of the case: Bulgarian.