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|05/09/2019||ESMA71-99-1205||ESMA publishes stress simulation framework for investment funds||Fund Management, Press Releases, Risk Analysis & Economics - Markets Infrastructure Investors||Press Release||PDF
|19/07/2019||ESMA71-99-1204||MMF stress testing and reporting guidelines release||Fund Management||Press Release||PDF
|29/03/2019||ESMA34-43-392||Q&A on the application of the UCITS Directive||Fund Management||Q&A||PDF
|05/02/2019||ESMA71-99-1106||Press release- ESMA consults on liquidity stress test guidance for investment funds||Fund Management||Press Release||PDF
|01/02/2019||ESMA71-99-1096||ESMA and EU securities regulators MoUs with FCA||Board of Supervisors, Brexit, Credit Rating Agencies, Fund Management, Press Releases, Trade Repositories||Press Release||PDF
|19/12/2018||ESMA71-99-1085||Press release- ESMA consults on measures to promote sustainability in EU capital markets||Credit Rating Agencies, Fund Management, MiFID - Investor Protection||Press Release||PDF
|04/10/2018||ESMA34-32-352||Q&A on the Application of the AIFMD||Fund Management||Q&A||PDF
|28/09/2018||ESMA71-99-1043||Press release- ESMA consults on stress testing rules for money market funds||Fund Management||Press Release||PDF
|24/05/2017||ESMA71-99-468||ESMA consults on Money Market Funds rules||Fund Management, Press Releases||Press Release||PDF
The European Securities and Markets Authority (ESMA) has published a Consultation Paper (CP) on the Money Market Funds Regulation (MMFR). The CP contains proposals on draft technical advice (TA), draft implementing technical standards (ITS), and guidelines under the MMFR. The key proposals relate to asset liquidity and credit quality, the establishment of a reporting template and stress test scenarios.
|30/01/2017||ESMA71-844457584-331||Opinion on UCITS Share Classes||Fund Management||Press Release||PDF
|16/12/2016||2016/1669||2016-1669 Q&A on AIFMD||Fund Management||Q&A||PDF
|21/11/2016||2016/1586||Questions and Answers on UCITS Directive||Fund Management||Q&A||PDF
|19/07/2016||2016/1138||ESMA advises on extension of funds passport to 12 non-EU countries||Fund Management||Press Release||PDF
|31/05/2016||2016/774||Q&A on the Application of the EuSEF and EuVECA Regulations||Fund Management||Q&A||PDF
|07/04/2016||JC/2016/21 PR||Joint Press Release draft RTS on PRIIPs||Fund Management, Joint Committee, Press Releases||Press Release||PDF
|31/03/2016||2016/472||ESMA publishes UCITS remuneration guidelines||Fund Management, Press Releases||Press Release||PDF
The European Securities and Markets Authority (ESMA) has published its final Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. ESMA has also written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector.
UCITS Remuneration Guidelines
The UCITS Remuneration Guidelines provide clarity on the requirements under the UCITS Directive for management companies when establishing and applying a remuneration policy for key staff. The Guidelines will ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment and disclosure. The Guidelines will apply to UCITS management companies and national competent authorities from 1 January 2017.
ESMA, while finalising its UCITS Remuneration Guidelines, had to balance the alignment with the AIFMD Remuneration Guidelines and the obligation to closely cooperate with the European Banking Authority (EBA) in order to ensure consistency with requirements developed for other financial services sectors, in particular credit institutions and investment firms.
The UCITS Directive prescribes that proportionality shall apply to the full set of remuneration principles set out under this Directive. However, the Guidelines do not include guidance on the possibility of dis-applying certain specific requirements on the pay-out process. This follows recent work and legal analysis, including the EBA’s Guidelines under CRD IV, which have called into question the existing understanding that the proportionality provisions as set out under the UCITS Directive and AIFMD may lead to a result:
ESMA considers that these scenarios should remain possible in certain situations and, in its letter to the European institutions, suggests that further legal clarity on this possibility could be beneficial to all the interested parties. Legislative changes in the relevant asset management legislation could be one way to further clarify the applicable regulatory framework.
ESMA believes that it would be inappropriate for the following fund managers to be subject in all circumstances to the requirements on the pay-out process:
ESMA also considers that it would be disproportionate to apply the requirements to relatively small amounts of variable remuneration and to apply certain requirements to certain staff when this would not result in an effective alignment of interests between the staff and the investors in the funds.
AIFMD Remuneration Guidelines
The amended AIFMD guidelines will come into force on 1 January 2017. The amendment to the AIFMD guidelines relates to the section of these guidelines dealing with the application of the remuneration rules in a group context and is intended to acknowledge the potential outreach of the CRD rules in a banking group.
The current AIFMD Guidelines will not be amended to bring them into line with the UCITS Guidelines pending clarification on the application of the proportionality principle.
The Guidelines in Annexes III and IV will be translated into the official languages of the European Union and the final texts published on the ESMA website. The deadline for compliance notifications will be two months after the publication of the translations.
|02/02/2016||2016/138||ESMA updates on supervisory work on closet index tracking||Fund Management, Press Releases||Press Release||PDF
The European Securities and Markets Authority (ESMA) has published a Statement providing details of its work on closet index tracking funds.
Closet indexing, also known as index hugging, refers to the practice of fund managers claiming to manage portfolios actively when in reality the fund stays close to a benchmark. ESMA is concerned the practice may harm investors as they are not receiving the service or risk/return profile they expect based on the fund’s disclosure documents while potentially paying higher fees compared to those typically charged for passive management.
ESMA conducted research on a sample of 2,600 funds for the period 2012-2014 to determine whether it could find any indication of closet indexing at an EU-wide level. Quantitative metrics, such as the percentage of a UCITS’ portfolio that does not coincide with the underlying equity benchmark, indicated between 5 and 15% of UCITS equity funds could potentially be closet indexers. ESMA then reviewed the investor disclosure documents of the funds concerned, to see how they described their management strategy, and found they tended to confirm the quantitative analysis results.
|11/11/2015||JC/2015/078||ESAs consult on PRIIPs key information for retail investors||Fund Management, Joint Committee, Press Releases||Press Release||PDF
|30/07/2015||2015/1238||ESMA advises on extension of AIFMD passport to non-EU jurisdictions||Fund Management, Press Releases||Press Release||PDF
|The European Securities and Markets Authority (ESMA) has published its Advice in relation to the application of the AIFMD (Alternative Investment Fund Managers Directive) passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) and its Opinion on the functioning of the passport for EU AIFMs and the national private placement regimes (NPPRs). The Advice and Opinion, required under AIFMD, will now be considered by the European Commission, Parliament and Council. ESMA Advice – Extension of AIFMD Passport to non-EU AIFMs and AIFs The Advice relates to the possible extension of the passport, currently only available to EU entities, to non-EU AIFMs and AIFs which are currently subject to EU NPPRs. ESMA conducted a country-by-country assessment, as this allowed it flexibility to take into account the different circumstances of each non-EU jurisdiction regarding the regulatory issues to be considered i.e. investor protection, competition, potential market disruption and the monitoring of systemic risk. ESMA assessed six jurisdictions – Guernsey, Hong Kong, Jersey, Singapore, Switzerland and the United States of America (USA) – who were selected based on a number of factors including the amount of activity already being carried out by entities from these countries under the NPPRs, EU national authorities’ knowledge and experience of dealing with their counterparts and the efforts by stakeholders from these countries to engage with ESMA’s process. The Advice concludes that no obstacles exist to the extension of the passport to Guernsey and Jersey, while Switzerland will remove any remaining obstacles with the enactment of pending legislation. No definitive view has been reached on the other three jurisdictions due to concerns related to competition, regulatory issues and a lack of sufficient evidence to properly assess the relevant criteria. Next Steps The Advice and Opinion have been sent to the Commission, Parliament and Council for their consideration on whether to activate the relevant provision in the AIFMD extending the passport through a Delegated Act. However, the institutions may wish to consider waiting until ESMA has delivered positive advice on a sufficient number of non-EU countries, before introducing the passport in order to avoid any adverse market impact that a decision to extend the passport to only a few non-EU countries might have. ESMA aims to finalise the assessments of Hong Kong, Singapore and the USA as soon as practicable and to assess further groups of non-EU countries until it has provided advice on all the non-EU countries that it considers should be included in the extension of the passport. ESMA Opinion – Functioning of the EU AIFMD passport and NPPRs The opinion on the functioning of the EU passport and the NPPRs contains ESMA’s preliminary assessment of the operation of these two mechanisms. Its preliminary view is that, given the short time period that has elapsed since the implementation of the AIFMD in Member States, a definitive assessment of their functioning is difficult and would recommend preparing a further opinion after a longer period.|
|23/07/2015||2015/1193||ESMA consults on UCITS remuneration guidelines||Fund Management, Press Releases||Press Release||PDF
|The European Securities and Markets Authority (ESMA) has launched a consultation on proposed Guidelines on sound remuneration policies under the UCITS V Directive and AIFMD. The Directive includes rules that UCITS must comply with when establishing and applying a remuneration policy for certain staff categories and the proposed UCITS Remuneration Guidelines further clarify the Directive’s provisions. The proposed Guidelines aim to ensure a convergent application of the remuneration provisions and will provide guidance on issues such as proportionality, governance of remuneration, requirements on risk alignment and disclosure. The final Guidelines will apply to UCITS management companies and national competent authorities.|