Tuesday October 2 2012
News Source: Fund Regulation
Focus: UCITS
Type: General
Country: European Union
On 26 September 2012, ESMA published the responses received regarding the consultation on the treatment of repurchase and reverse repurchase agreements.
ESMA was seeking views on the appropriate treatment of repo and reverse repo arrangements in the context of the guidelines on ETFs and other UCITS issues.
The consultation paper set out ESMA’s proposal for the treatment of repo and reverse repo arrangements. ESMA proposed a distinct regime for repo and reverse repo arrangements which, unlike for securities lending arrangements, would allow a proportion of the assets of the UCITS to be non-recallable at any time at the initiative of the UCITS. The proposed guidelines include safeguards to ensure that the counterparty risk arising from these arrangements is limited and that UCITS entering into such arrangements can continue to execute redemption requests.
ESMA will take into account the responses to this consultation in developing the final policy approach on repo and reverse repo transactions. That policy approach will be integrated into the remainder of the guidelines on ETFs and other UCITS issues, which are set out in Annex III of the paper.
Please refer to the link below to access the responses received:
Should you wish to discuss any of the matters raised above, please do not hesitate to email info@funds-axis.com