UCITS

ESMA Publishes First Annual Statistical Report on Retail Investment Products

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On January 10, ESMA published its first annual statistical report on the performance and costs of retail investment products in the EU (ESMA 50-165-731).

The report highlights, in particular, the significant impact of costs on the final returns that retail investors make on their investments. It covers undertakings for collective investments in transferable securities (“UCITS“), alternative investment funds sold to retail investors (“retail AIFs“) and structured retail products (“SRPs“).. READ MORE →

EC Seeks Guidance on Sustainable Finance

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The European Commission (“EC“) published an open letter to EIOPA and ESMA on August 1, 2018. The letter sought technical advice in relation to sustainable finance, in particular technical advice relating to legislation.

The letter, the full version of which is available here, outlines that the European Commission adopted a package of measures on sustainable finance on May 24, 2018, however they are seeking advice in relation to the possible amendment of legislation such as UCITS, MiFID II and Solvency II.

The aim of the letter, and the possible changes proposed therein, is to incorporate sustainability risks in the decisions taken and processes applied by financial market participants.

The letter asks that EIOPA and ESMA provide their insight by April 30, 2019.

ESMA Updates Q&A on Application of UCITS Directive

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The European Securities and Markets Authority (ESMA) has published an updated version of its Q&A paper on the application of the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive (2009/65/EC) as most recently revised by UCITS V (2014/91/EU).  The purpose of the Q&A is to promote common supervisory approaches and practices in the application of the UCITS and its implementing measures.  The most recent updates reflect a Q&A relating to the valuation of OTC derivatives and are highlighted in yellow in the paper.

The latest version of the Q&A is available here.

ESMA Publishes Responses to its Discussion Paper on UCITS Share Classes

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The European Securities and Markets Authority (“ESMA“) has published the responses received to the Discussion Paper on UCITS share classes.

The UCITS Directive recognizes the possibility for UCITS to offer different share classes to investors but it does not prescribe whether, and to what extent, share classes of a given UCITS can differ from one another. ESMA has identified diverging national practices as to the types of share class that are permitted, ranging from very simple share classes (e.g. with different levels of fees) to much more sophisticated share classes (e.g. which may potentially have different investment strategies).

ESMA published the discussion paper on April 6, 2016. Respondents included the: Alternative Investment Management Association, European Fund and Asset Management Association and The Investment Association.

UCITS 5 Political Agreement Reached

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On February 25, the European Parliament published a press release announcing that political agreement has been reached with the Council of the EU on the proposed UCITS V Directive.

The press release notes the following areas of agreement:

  • Payment of fund managers.
  • The appointment of a depository by UCITS or UCITS management companies.
  • Provision of penalties by EU member states for funds failing to comply with national UCITS authorization and reporting rules.   Press Release.

ESA Issues ESMA and EBA Consultation for Securities and Banking Complaints Handling

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On November 6, the Joint Committee of the European Supervisory Authorities (ESAs) issued a consultation paper by the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) concerning draft guidance for the handling of complaints in the securities and banking industries. This guidance aims to:

  • clarify expectations on firms’ procedures for complaints handling;
  • give guidance on the provision of information to complainants and the procedures for answering complaints;
  • harmonize the complaint handling arrangements of firms in order to help protect consumers; and
  • set a minimum level of supervision for firms’ complaint handling arrangements on an EU-wide basis.

The guidance applies to investment firms, UCITS management companies and UCITS investment companies that have not designated a management company, AIFMs providing MiFID services, credit institutions and e-money institutions.

The deadline for responses to the consultation is February 7, 2014, with the final report scheduled to be published in the first quarter of 2014.  Consultation Paper.