ESMA has issued an opinion on share classes of UCITS
Press release 17/06
On 30 January 2017, ESMA has issued an Opinion, addressed to national regulators in order to ensure a harmonised approach across the EU, in which it sets out the following four high-level principles which UCITS must follow when setting up different share classes:
- common investment objective;
- non-contagion;
- pre-determination; and
- transparency.
It should be noted that ESMA considers that hedging arrangements at share class level − with the exception of currency risk hedging – are not compatible with the requirement for a fund to have a common investment objective.
In order to mitigate the impact on investors in share classes established prior to the issuance of this Opinion which do not comply with these principles, ESMA is of the view that they should be allowed to continue to operate. However, such share classes should be closed for investment by new investors until 30 July 2017 at the latest, and for additional investment by existing investors until 30 July 2018.
As a consequence, the CSSF expects UCITS to take the necessary measures to comply with the transitional provisions set forth in the ESMA Opinion. Furthermore, new share classes do henceforth have to comply with the common principles for setting up share classes in UCITS funds.
ESMA’s press release and the Opinion can be found on ESMA’s website at the following addresses:
https://www.esma.europa.eu/sites/default/files/library/opinion_on_ucits_share_classes.pdf
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17 December 2010 - Updated on 28 July 2023
Law of 17 December 2010 (coordinated version)
relating to undertakings for collective investmentLaw -
17 November 2009
Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009
on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (“UCITS Directive”)EU directive