CSSF FAQ on UCITS Directive – Clarification on fee disclosure

News

CSSF FAQ on UCITS Directive – Clarification on fee disclosure

12 March 2020

Regulatory News Alert

Context and objectives

On 9 March 2020, the Commission de Surveillance du Secteur Financier (CSSF) updated the Frequently Asked Questions (FAQ) concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment (UCITS). With this eighth version of the UCITS FAQ, the CSSF aims to clarify the disclosure of the performance fee, investment manager’s fee and investment advisor’s fee to investors of a UCITS.

PDF - 128kb

In particular, the CSSF clarifies that:

  • The investment manager is responsible and accountable for the investments of the UCITS and its related performance. The fee model and the investment manager must be disclosed in the prospectus. Performance fee arrangement with any investment advisor contractually linked to the UCITS must be disclosed as well
  • Expenses or fees shall be disclosed in the prospectus: the difference between fees to be paid by the unit-holders, and fees to be paid by the assets of the UCITS, the method of calculation or the rate of the fee to each recipient
  • Either the fees related to investment management or the other expenses, fees for activities beyond the scope must be disclosed to investors:
    • In case of non “all-in” fees service: the investment manager’s fee and/or the investment advisor’s fee shall only pay for investment management, respectively investment advice. When other expenses or fees for activities beyond the direct scope of investment management or advice are payable, they must disclose these fees separately from direct fees and informed clearly to investors about the nature of such expenses or fees
    • In case of “all-in” fees service: The prospectus should specify the scope and nature of all-included fees such as compensation, fees, expenses etc., which allows the investor to have comparison across UCITS and facilitate investment choice

 

Useful links

Access the updated CSSF’s UCITS FAQ.

 

How can Deloitte help you?

Deloitte’s specialists can assist you in the review of the fees disclosure wording in light of the evolution of the regulatory framework and market trends, with a particular focus on performance fees and “all-in fees” methodologies and disclosures.

Deloitte’s Regulatory Watch Kaleidoscope service helps you stay ahead of the regulatory curve to better manage and plan upcoming regulations.

Contacts

Subject matter specialists

Xavier Zaegel
Partner – Capital Markets/Financial Risk Leader
Tel : +352 45145 2748
xzaegel@deloitte.lu

Sylvain Crepin
Partner – Finance Industry Solutions
Tel : +352 45145 4054
screpin@deloitte.lu

Jean-Paul Frisot
Director – Capital Markets/Financial Risk
Tel : +352 45145 2607
jpfrisot@deloitte.lu

Julien Baguet
Senior Manager – Capital Markets
Tel : +352 45145 3648
jbaguet@deloitte.lu


Regulatory Watch Kaleidoscope service

Simon Ramos
Partner – IM Advisory & Consulting
Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Jean-Philippe Peters
Partner – Risk Advisory
Tel : +352 45145 2276
jppeters@deloitte.lu

Benoit Sauvage
Director – RegWatch, Strategy & Consulting
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Strategy Regulatory & Corporate Finance
Tel : +352 45145 2311
mvuksic@deloitte.lu

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