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Date Ref. Title Section Type Download Info Summary Related Documents Translated versions
07/10/2019 ESMA90-1-167 Update on the UK’s withdrawal from the European Union- preparations for a possible no-deal Brexit scenario on 31 October 2019 , , , Statement PDF
179.84 KB
12/07/2018 ESMA42-110-998 Timely submission of requests for authorisation in the context of the United Kingdom withdrawing from the European Union , Statement PDF
128.92 KB
01/04/2020 ESMA70-156-2287 Technical Advice to the European Commission on weekly position reports under MiFID II , Technical Advice PDF
231.84 KB
27/03/2014 2014/312 Technical advice to the European Commission on the information that competent authorities should provide to ESMA pursuant to Article 67(3) of the AIFMD Technical Advice PDF
330.79 KB
Reasons for publication ESMA is issuing this technical advice in response to the mandate received from the European Commission on 20 December 2013 for advice on the possible content of the delegated act required by Article 67(5) of the AIFMD, concerning the information that EU competent authorities have to provide quarterly to ESMA pursuant to Article 67(3) of the Directive. This information is needed in order to allow ESMA to produce the opinion and the advice required in Article 67(1) of the AIFMD, in relation to the possible extension of the AIFMD passport to non-EU AIFs and non-EU AIFMs. Contents Section II describes the background of the proposal. Section III specifies the timing for the provision of the information to ESMA and lists the information that the competent authorities should provide quarterly to ESMA. The list of information is divided into three parts: the first refers to the information about the functioning of the passport for EU AIFMs; the second deals with the functioning of the national private placement regime for non-EU AIFs and non-EU AIFMs; and the third refers to the issues arising from the functioning of both systems. Finally, Section IV reproduces the mandate for advice issued by the European Commission. Next steps ESMA will cooperate closely with the European Commission in order to facilitate an expeditious adoption of the delegated act required by Article 67(5) of the AIFMD.
21/07/2017 ESMA43-318-752 Statement to European Parliament Petitions Committee Statement PDF
359.62 KB
17/12/2021 ESMA81-459-36 Statement on Preparedness for the Cessation of EUR, GBP, CHF and JPY LIBORs and EONIA, and ceasing use of USD LIBOR in new contracts, at the end of 2021 Statement PDF
169 KB
09/12/2021 ESMA81-459-35 Statement from the EUR Risk Free Rates Working Group Statement PDF
64.3 KB
26/03/2019 ESMA71-99-1136 SCSC Chair reappointed , Statement PDF
78.43 KB
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.

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
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
31/03/2021 ESMA32-63-1156 Public statement Application of TD requirements following Brexit , , , Statement PDF
104.37 KB
01/08/2013 2013/1072 Practical arrangements for the late transposition of the AIFMD Opinion PDF
93.1 KB
The European Securities and Markets Authority (ESMA) has published an Opinion on arrangements for the late imposition of the AIFMD. The scope of the opinion is confined to the provision of collective portfolio management services. Arrangements before implementation of the Directive in all Member States Notification of marketing of EU AIFs when the host MS of the AIFM has not transposed the Directive (Articles 31 and 32 of the Directive) ESMA believes that, if the Directive has been transposed in the home MS of the AIFM, the competent authority of the host MS of the AIFM (Article 32) or home MS of the AIFM (Article 31) may not refuse a valid notification under the Directive on the ground that the Directive has not yet been transposed in the host MS. This applies irrespective of whether the marketing is done using the freedom to provide services or by means of a branch. Management passport (Article 33 of the Directive) ESMA believes that AIFMs established in a MS that has transposed the Directive should be able to manage an EU AIF via the management passport, both using the freedom to provide services or by means of a branch, in a MS where the Directive has not been transposed, irrespective of the provisions currently in place in such jurisdiction since the relevant provisions of the Directive are of a self-executing nature, and provided the AIFM is authorised to manage that type of AIF in accordance with Article 33(1) of the AIFMD. Any local restrictions on AIFMs that are not in accordance with the AIFMD will need to be disapplied.
13/10/2011 2011/342 Opinion- Practical arrangements for the late transposition of the UCITS IV Directive Opinion PDF
41.33 KB
28/05/2021 ESMA50-164-4575 Opinion- Collection of information for the effective monitoring of systemic risk under Article 24(5), first subparagraph, of the AIFMD Opinion PDF
135.74 KB
13/07/2017 ESMA70-154-270 Opinion to support supervisory convergence in the area of secondary markets in the context of the United Kingdom withdrawing from the European Union , , Opinion PDF
181.69 KB
13/07/2017 ESMA35-45-344 Opinion to support supervisory convergence in the area of investment management in the context of the United Kingdom withdrawing from the European Union , , Opinion PDF
246.6 KB
13/07/2017 ESMA35-43-762 Opinion to support supervisory convergence in the area of investment firms in the context of the United Kingdom withdrawing from the European Union , , Opinion PDF
236.23 KB
30/01/2017 ESMA34-43-296 Opinion on UCITS Share Classes Opinion PDF
332.69 KB
12/04/2016 2016/596 Opinion on loan origination Opinion PDF
118.55 KB