Wednesday June 6 2018

News Source: Fund Regulation

Focus: UCITS

Type: General

Country: France




It has been reported that pursuant to the ESMA Opinion n° 34-43-296 relating to share classes of UCITS, the AMF updated its regulations and doctrine with respect to the hedging possible when a fund (or a compartment) issues classes of shares:

  • UCITS: in accordance with the ESMA opinion, UCITS funds may hedge currency risk against the level of a single share class.
  • Retail AIFs: in addition to the currency risk, a single share class may hedge another risk factor (examples are provided in the amended doctrine mentioned below).
  • Professional AIFs: they can now adopt more flexible management strategies for share classes, including hedging or exposure strategies.

In order to apply such rules, the AMF provides that the following principles should be followed:

  • Non-Contagion Principle.
  • Transparency Principle.

In light of the above, the AMF Position-Recommendation 2011-05 has been amended by the AMF.