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30/09/2016 2016/1408 ESMA appoints new chairs to Standing Committees , , , Statement PDF
141.3 KB

The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed the following individuals to serve as chairs of its standing committees:

  • Hannelore Lausch, Executive Director of the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Germany, will chair the Market Data Standing Committee;
  • Cyril Roux, Deputy Governor of the Central Bank of Ireland (CBI, will chair the Investment Management Standing Committee; and
  • Merel van Vroonhoven, Chair of the Autoriteit Financiële Markten (AFM), Netherlands, will chair the Investor Protection and Intermediaries Standing Committee.

The standing committees are expert groups drawn from ESMA staff and the national competent authorities for securities markets regulation in the Member States, and are responsible for the development of policy in their respective areas.  The appointments are for a period of two years and commence with immediate effect.

02/02/2016 2016/165 Public Statement- Supervisory work on potential closet index tracking Statement PDF
258.17 KB

The European Securities and Markets Authority (ESMA) is issuing this statement to inform stakeholders and especially investors about the potential for some European collective investment funds to be ‘closet index trackers’, and to give details on the work that ESMA has been doing in this context.

Introduction

  1. ESMA’s attention was drawn to an alleged practice in the European collective investment management industry whereby asset managers claim, according to their fund rules and investor information documentation, to manage their funds in an active manner while the funds are, in fact, staying very close to a benchmark and therefore implementing an investment strategy which requires less input from the investment manager. At the same time, it is alleged that these funds charge management fees in line with those of funds that are considered to be actively managed[1]. This practice is commonly referred to as ‘closet indexing’ or ‘index hugging’.
  2. In many EU Member States, NCAs have launched or are in the process of launching specific investigations, in addition to their regular monitoring and supervisory functions, to determine the potential extent of closet indexing in their jurisdictions, with a focus on equity funds at this stage. At the same time, the issue has been the subject of considerable attention by investor protection groups and the media throughout the European Union.

Reasons for issuing this statement

  1. The issues around ‘closet indexing’ form part of a broader issue on the effectiveness of investor disclosure and the legitimate expectations of investors in respect of the service provided by some asset managers. Nonetheless, the potential practice of closet indexing in Europe raises questions that merit closer analysis. The analysis carried out by ESMA (see paragraphs 9 to 16 for more details) indicates that there might be a small, but not insignificant number of funds in the EU equity fund sector that may be closet index trackers. If the existence of this practice were to be confirmed by further supervisory scrutiny carried out at national level, this could mean that:
  1. investors could be making investment decisions based on an expectation that they will be provided with a more active fund management service than they receive in practice and, therefore, may be paying higher management fees than that usually envisaged for a passive/not significantly active management service;
  2. investors may be exposed to a different risk/return profile than they expect; and
  3. some asset managers may not provide clear descriptions of how funds are managed in key disclosure documents such as the fund’s Prospectus and Key Investor Information Document (KIID).
  1. ESMA considers it important that fund managers take their commitments in disclosure documents seriously. Managers should expect supervisory consequences where evidence for incorrect disclosures is proven.
 

[1] ESMA recognises that management fees may depend on a number of factors.

30/11/2021 2016/572 Compliance table- Guidelines on key concepts of the AIFMD , Compliance table PDF
153.05 KB
04/11/2022 2016/602 Compliance table- Guidelines on ETFs and other UCITS issues , Compliance table PDF
139.61 KB
04/05/2016 2016/675 Compliance table- Guidelines on sound remuneration policies under the AIFMD (ESMA/2013/232) , Compliance table PDF
143.93 KB
27/03/2020 ESMA31-67-742 Public statement on publication deadlines under the Transparency Directive , Statement PDF
88.72 KB
04/02/2022 ESMA32-67-802 Compliance table on the Guidelines on the enforcement of financial information , Compliance table PDF
135.55 KB
04/10/2017 ESMA34-32-316 Compliance table for the Guidelines sound remuneration policies under the AIFMD (ESMA/2016/579) , Compliance table PDF
144.26 KB
30/11/2021 ESMA34-32-458 Compliance table- Guidelines on reporting obligations under Articles 3(3)(d) and 24(1),(2) and (4) of the AIFMD , Compliance table PDF
111.92 KB
13/11/2020 ESMA34-32-699 Guidelines compliance table- Guidelines on model MoU concerning consultation, cooperation and the exchange of information related to the supervision of AIFMD entities (ESMA/2013/998) , Compliance table PDF
108.66 KB
23/06/2022 ESMA34-32-898 Compliance table on Guidelines on Article 25 of the AIFMD , Compliance table PDF
199.22 KB
09/07/2020 ESMA34-39-109 Public statement on external support within the meaning of Article 35 of the MMF Regulation , Statement PDF
118.34 KB
04/10/2017 ESMA34-43-352 Compliance table for the Guidelines on sound remuneration policies under the UCITS Directive , Compliance table PDF
154.54 KB
24/03/2021 ESMA34-43-880 ESMA presents the results of the 2020 Common Supervisory Action (CSA) on UCITS liquidity risk management Statement PDF
153.02 KB
17/08/2022 ESMA34-45-1128 Compliance table- Guidelines on performance fees in UCITS and certain types of AIFs , , Compliance table PDF
232.45 KB
20/04/2022 ESMA34-45-1445 Compliance table on Guidelines on marketing communications under the Regulation on the cross-border distribution of funds , Compliance table PDF
192.62 KB
16/05/2022 ESMA34-45-1633 Public statement on actions to manage the impact of the Russian invasion of Ukraine on investment fund portfolios Statement PDF
125.27 KB
09/04/2020 ESMA34-45-896 Actions to mitigate the impact of COVID-19 on the deadlines for the publication of periodic reports by fund managers , Statement PDF
113.03 KB
17/08/2022 ESMA34-45-974 Compliance table on Guidelines on liquidity stress testing in UCITS and AIFs , Compliance table PDF
230.68 KB
27/08/2020 ESMA34-49-184 ESMA’s guidelines on stress test scenarios under the MMFR continue to be applicable until their 2020 update Statement PDF
126.94 KB