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ESMA is active in the area of collective investment management, commonly known as fund management. The two main pieces of EU legislation in this area are the Directive on Undertakings for Collective Investment in Transferable Securities (UCITS) and the Alternative Investment Fund Managers Directive (AIFMD).

Fund management Fund management

ESMA’s role with respect to these two Directives has included issuing technical advice to the European Commission, developing guidelines to market participants, preparing regulatory and implementing technical standards, and issuing opinions and Q&As. Although the bulk of ESMA’s work in the fund management area relates to UCITS and AIFMD, ESMA also carries out work in relation to venture capital funds, social entrepreneurship funds and long-term investment funds.


The UCITS Directive is a detailed, harmonised framework for investment funds that can be sold to retail investors throughout the EU. This means that funds authorised in one Member State can be marketed in another Member State using a passporting mechanism. Originally introduced in 1985, the UCITS rules have been revised several times, most recently via the UCITS V Directive which came into force on 18 March 2016. UCITS V aims to bring the UCITS regime into line with the AIFM Directive on remuneration and depositary rules and introduce a range of corresponding measures: it clarifies the depositary role, introduces rules on remuneration policies to be applied to key members of the UCITS management company’s staff and harmonises minimum administrative sanctions for infringements to the UCITS rules.

UCITS are a very successful product: there are more than 29,000 UCITS funds in the EU which represent over €8 trillion of assets under management. 

Report about an infringement of national provisions transposing the UCITS Directive

If you wish to report an infringement of national provisions transposing the UCITS Directive, please fill in this form and email it to . In the subject title of your email, please state "Report about infringement of the UCITS Directive".


The AIFMD applies to managers of funds that are not UCITS, including hedge funds, private equity funds, and real estate funds. Taken together, the UCITS Directive and the AIFMD provide for a comprehensive set of rules for fund management activities in the EU. Alternative investment funds can be sold to professional investors throughout the EU on the basis of a passport. The AIFMD is notable for the detailed regulatory reporting regime that it introduced, which requires managers to submit an extensive set of information to their national authorities on aspects such  as their investment portfolios, leverage and collateral. Another important element of the AIFMD – and of ESMA’s work on the Directive – relates to third countries, and more specifically the possibility for the EU passport to be extended to non-EU funds and managers. Should such a passport be introduced, ESMA will have an important role to play in the smooth functioning of this new mechanism.

Other fund management issues

The fund management sector covers a wide range of entities and activities, including fund administrators, depositaries, specialist providers (e.g. risk management consultants) and valuers. There are also many different types of funds, some of which area covered by bespoke legislation, including the Regulations and European Venture Capital Funds (EuVECA), European Social Entrepreneurship Funds (EuSEF) and European Long-term Investment Funds (ELTIF).