UCITS Liquidity Risk Management ESMAs 11 Areas for Improvement

UCITS Liquidity Risk Management: ESMA’s 11 Areas for Improvement

ESMA has published the results of the 2020 Common Supervisory Action (CSA) on UCITS liquidity risk management (LRM). UCITS are characterised by the offer to investors of on-demand liquidity. Article 84(1) states that UCITS shall repurchase or redeem its units at the request of any unit-holder. If the assets held within the fund cannot be sold quickly to meet redemption requests, there could be severe issues in paying redeeming investors. This can be exacerbated in times of stress when investors may look to redeem en masse whilst the market for the assets is drying up.

UK 0.1% Short Selling Notification Threshold Here to Stay social share image

UK 0.1% Short Selling Notification Threshold Here to Stay

This week, on the 1st February 2021, the Statutory Instrument (SI) amending the initial notification threshold under Article 5(2) of the Short Selling Regulation (SSR) entered into force. The SI amends the reporting of net short positions to the Financial Conduct Authority (FCA), in relation to the issued share capital of a company that has shares admitted to trading on a trading venue, from 0.2% to 0.1%.

Are you complying with the cost related provisions of the UCITS framework?

Are you complying with the cost related provisions of the UCITS framework?

Yesterday, ESMA announced that it will be launching a Common Supervisory Action (CSA) with national competent authorities (NCAs) on the supervision of costs and fees of UCITS across the European Union. The CSA aims to assess the compliance of supervised entities with the relevant cost-related provisions in the UCITS framework, and the obligation of not charging investors with undue costs.

During the CSA, national competent authorities will take into account the supervisory briefing on the supervision of costs published by ESMA in June 2020.