New ESMA paper on UCITS share classes


New ESMA paper on UCITS share classes

12 April 2016

Regulatory News Alert

Following the first consultation paper on UCITS share classes in December 2014, ESMA introduced on 6 April 2016 a new consulting paper on this topic with their current thinking regarding a framework for UCITS share classes. This paper states high level principles and new operational principles.

ESMA came up with some principles listed hereafter guiding the establishment of UCITS share classes:

  1. Common investment objective
  2. Non-contagion
  3. Pre-determination for all features of share classes
  4. Transparency

As for the last consultation paper, ESMA continues to argue against duration and volatility hedging at share class level as they might prove difficult to be compliant with their principle of non-contagion.

Feedback from the industry is requested on these new elements by 6 June 2016 which will lead ESMA to take further steps at the end of 2016.

PDF - 36kb
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