EUROPEAN UNION: ESMA Issues Discussion Paper on UCITS Share Classes

Monday April 11 2016

ESMA has identified diverging national practices as to the types of share class that UCITS are permitted to offer, ranging from very simple share classes (e.g. with different levels of fees) to much more sophisticated share classes (e.g. which may potentially have different investment strategies). The UCITS Directive recognises the possibility for UCITS to offer different share classes to investors but it does not prescribe whether, and to what extent, share classes of a given UCITS can differ from one another.

Following the discussion paper which was issued in December of 2014, this discussion paper seeks views on ESMA’s current thinking with respect to the development of a framework for UCITS share classes throughout the EU.

The paper centres on a set of high-level principles regarding share classes, which are further detailed, where necessary, by a set of operational principles. The consultation seeks detailed feedback on whether and how share classes can actually work under the principles outlined in this discussion paper.

The ESMA deadline for receipt of comments on the discussion paper is 6^th June 2016.

Please click on the above link for further details.