Thursday August 6 2015

News Source: Fund Regulation

Focus: European Long Term Investment Funds

Type: General

Country: European Union




On 31 July 2015, the European Securities and Markets Authority (ESMA) issued a consultation paper concerning draft regulatory technical standards under the European long-term investment fund (ELTIF) Regulation.

The ELTIF Regulation provides that ESMA shall develop draft regulatory technical standards (RTS) to determine the criteria for establishing the circumstances in which the use of financial derivative instruments solely serves hedging purposes, the circumstances in which the life of a European long-term investment fund (‘ELTIF’) is considered sufficient in length, the criteria to be used for certain elements of the itemised schedule for the orderly disposal of the ELTIF assets, the costs disclosure and the facilities available to retail investors.

This consultation paper represents the first stage in the development of the draft RTS and sets out proposals for their content on which ESMA is seeking the views of external stakeholders.

Section 2 of the consultation paper explains the background to the proposals. Sections 3 to 9 give detailed explanations on the content of the proposals and seek stakeholders’ input through specific questions.

Annex I sets out the list of questions contained in this paper – Topics that are included within this list of questions are:

  • the main risks that are necessary to be covered at the level of the ELTIF;
  • the scope of risks that ought to be covered by the manager of the ELTIF;
  • whether the approach to hedging should be tailored to the specific case of ELTIFs;
  • eligible investments of the ELTIF; and
  • RTS on Article 25(3) of the ELTIFs Regulation.

Annex II contains the legislative mandate to develop draft RTS;

Annex III provides for the cost-benefit analysis related to the draft RTS;

Annex IV contains the full text of the draft RTS.

ESMA has invited comments by 14 October 2015. Responses to the consultation paper can be sent using the response form, via the ESMA website, under the heading ‘Your input/Consultations’.

Click on the above link for further details.