ESMA LIBRARY

The ESMA Library contains all ESMA documents. Please use the search and filter options to find specific documents.
40
DOCUMENTS

REFINE YOUR SEARCH

Sections

Type of document

Your filters
Innovation and Products X Speeches X Press Releases X Fund Management X Credit Rating Agencies X Statement X
Reset all filters
Date Ref. Title Section Type Download Info Summary Related Documents Translated versions
11/08/2011 2011/266 Public statement- harmonised regulatory action on short-selling in the EU , Statement PDF
97.39 KB
25/11/2011 2011/397 Public statement on sovereign debt in IFRS financial statements , , , Statement PDF
189.46 KB
30/08/2012 2012/537 STATEMENT- Short Selling Regulation Update: Market Maker & Primary Dealer Exemption Notification Procedure , , Statement PDF
77.92 KB
The European Securities and Markets Authority (ESMA) is publishing this notice to alert financial market participants to its upcoming consultation on the market making and authorised primary dealer exemption under the EU’s Short Selling Regulation (SSR) and the procedure to be followed by firms and regulators in dealing with notifications of intention to use the exemption.
01/10/2012 2012/641 ESMA approves Axesor S.A. as a credit rating agency , Statement PDF
83.07 KB
04/12/2012 2012/802 Statement: Operating Principles and Areas of Exploration in the Regulation of the Cross-Border Derivatives Market Statement PDF
131.03 KB
20/03/2013 2013/336 ESMA certifies Kroll Bond Rating Agency to operate in the EU Statement PDF
76.36 KB
07/05/2014 2014/477 ESMA approves EuroRating as a credit rating agency Statement PDF
75.01 KB
The European Securities and Markets Authority (ESMA) has approved the registration of EuroRating Sp. z o.o., based in Poland, as a credit rating agency (CRA) under Article 16 of the CRA Regulation. The registration takes effect from 7 May 2014.
31/07/2014 2014/944 Potential Risks Associated with Investing in Contingent Convertible Instruments , Statement PDF
106.1 KB
The European Securities and Markets Authority (ESMA) is issuing this statement to clarify to institutional investors risks from a newly emerging asset class referred to by most market participants as contingent convertibles instruments (CoCos). If they work as intended in a crisis CoCos will play an important role to inhibit risk transfer from debt holders to taxpayers. They along with standards to improve the quality and quantity of bank capital reflect a considerate response to the former regulatory capital framework. However, it is unclear as to whether investors fully consider the risks of CoCos and correctly factor those risks into their valuation. ESMA believes there are specific risks to CoCos and that investors should take those risks into consideration prior to investing in these instruments.
07/11/2014 2014/1345 ESMA certifies HR Ratings de México to operate in the EU Statement PDF
87.87 KB
The European Securities and Markets Authority (ESMA) has formally approved the certification in the European Union of HR Ratings de México, S.A. de C.V. (HR Ratings), a Mexican credit rating agency (CRA), under Article 16 of the CRA Regulation. The certification takes effect from 7 November 2014.
24/11/2014 2014/1399 Public Statement- ESMA approves Moody’s Investors Service EMEA Limited as a credit rating agency Statement PDF
134.62 KB
The European Securities and Markets Authority (ESMA) has approved the registration of Moody’s Investors Service EMEA Limited, based in the UK, as a credit rating agency (CRA) under Article 16 of the CRA Regulation. The registration takes effect from 24th November 2014. Moody’s Investors Service EMEA Limited’s registration as a CRA means that its credit ratings can be used for regulatory purposes under EU legislation. This is the seventh entity in the Moody’s Investors Service group to be registered as an EU Registered Credit Rating Agency.
12/12/2014 2014/1486 Public Statement- ESMA certifies Egan-Jones Ratings Co. to operate in the EU Statement PDF
88.76 KB
The European Securities and Markets Authority (ESMA) has formally approved the certification in the European Union of Egan-Jones Ratings Co. (EJR), an U.S. American credit rating agency (CRA), under Article 16 of the CRA Regulation. The certification takes effect from 12 December 2014.EJR is headquartered in Haverford (Pennsylvania, USA) and is subject to registration, supervision and enforcement by the U.S. Securities and Exchange Commission as a “Nationally Recognized Statistical Rating Organization”.
27/10/2015 2015/1605 Public Statement- INC Rating registration FINAL Statement PDF
136.3 KB
01/12/2015 2015/1778 Public Statement- Expert RA registration Statement PDF
123.49 KB
28/01/2016 2016/102 Statement by Steven Maijoor on behalf of the ESAs , Statement PDF
107.74 KB

Statement at the ECON scrutiny hearing on behalf of the ESAs.

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.

10/02/2016 2016-278 EU-US approach CCP equivalence , Statement PDF
97.22 KB
13/06/2016 2016/943 Statement by Verena Ross at ECON Public Hearing on Securitisation , Statement PDF
242.38 KB
20/06/2016 2016/940 Statement by Steven Maijoor at ECON MiFID II/MiFIR Scrutiny Session, 21 June 2016 , Statement PDF
235.65 KB
13/07/2016 2016/1122 Feedback Statement on the Discussion Paper on the validation and review of CRAs’ methodologies Statement PDF
477.03 KB
21/07/2016 2016/1159 Public notice- Infrigement by Fitch , Statement PDF
324.96 KB