New questions regarding the "UCITS V" implementation
On 1st February 2016, the European Securities and Markets Authority (ESMA) published a consolidated version of its Questions & Answers (Q&A) on the application of the UCITS Directive.
The consolidated Q&A consolidates all Q&As relating to the UCITS Directive previously issued by ESMA into a single document:
- the Key Investor Information Document (KIID) for UCITS (2015/ESMA/631);
- ESMA's guidelines on ETFs and other UCITS issues (ESMA/2015/12);
- Notification of UCITS and exchange of information between competent authorities (ESMA/2012/428); and
- Risk Measurement and Calculation of Global Exposure and Counterparty Risk for UCITS (ESMA/2013/1950).
These four Q&As are hereby repealed and replaced by this document.
Moreover, the Q&A includes new questions on additional documents funds need to provide for the "UCITS V" implementation by the deadline transposition date of 18 March 2016.
More specifically ESMA confirmed the following:
- With regard to remuneration-related information, the updates to the UCITS KIID documents will need to be performed at the next annual update after 18 March 2016 (or on the first occasion after 18 March 2016 as the information becomes available). Similarly, a UCITS will be allowed to add the relevant information to the prospectus at the next occasion and in any event by 18 March 2017. As to the annual report, for those disclosures relating to periods that end on or after 18 March 2016, but before the UCITS management company has completed its first annual performance period in which it has to comply with articles 14a and 14b of the Directive, the UCITS management company should include the remuneration-related information in the report on a best efforts basis and to the extent possible, explaining the basis for any omission.
- With regard to the depositary appointment contracts, the Q&A re-iterate that UCITS V will apply as of 18 March 2016 and that depositary contracts should be revised "promptly" in accordance with the transitional arrangements allowed by the Level 2 delegated act transmitted to the co-Legislators in December (and still awaiting adoption).
The Q&A can be found here.