On February 18th 2013 the CSSF published Circular 13/559 (the "Circular") relating to the guidelines (the "Guidelines") of the European Securities Market Authority on ETFs and other UCIT's issues (ESMA/2012/832).
The aim of the Circular is to implement into Luxembourg regulation the Guidelines which entered into force on February 18th 2013. In addition, the Circular provides an overview of the main provisions of the Guidelines.
For further information on the Guidelines please see our newsletters of September 2012 and January 2013.
Any new UCITS created after February 18th 2013 should comply with the Guidelines immediately.
UCITS that exist before February 18th 2013 and that invest in financial indices that do not comply with the Guidelines should align their investments with the Guidelines by February 18tth 2014.
Structured UCITS that exist before February 18tth 2013 are not required to comply with the Guidelines provided that they do not accept any new subscriptions after February 18tth 2013. However, in order to be able to continue offering the underlying payoff to existing investors, such existing UCITS can actively manage their financial contracts.
UCITS that exist before February 18th 2013 should align their portfolio of collateral with the Guidelines by February 18th 2014. However, any reinvestment of cash collateral after February 18th 2013 should comply with the Guidelines immediately.
UCITS that exist before February 18th 2013 and that have entered into revenue sharing arrangements should comply with the disclosure requirements applicable to such arrangements by February 18tth 2014.
UCITS ETFs that exist before February 18th 2013 are not required to comply with Guidelines relating to identifiers until the earlier of:
- the first occasion after February 18th 2013 on which the name of the fund is changed for another reason; and
- February 18tth 2014.
UCITS ETFs that exist before February 18th 2013 should comply with the provisions related to the treatment of secondary market investors immediately.
Requirements relating to the content of the fund rules or instrument of incorporation of an existing UCITS, its prospectus, its key investor information document, or any marketing communication that it has issued prior to February 18th 2013, do not come into effect until the earlier of:
- the first occasion after February 18th 2013 on which the document or communication, having been revised or replaced for another purpose, is published; and
- February 18th 2014.
Requirements to publish information in the report and accounts of an existing UCITS do not apply in respect of any accounting period that has ended before February 18th 2013.
In addition, on March 15th 2013, ESMA issued a Questions and Answers document (ESMA/2013/314) relating to the Guidelines. The Q & A is aimed at supervisory authorities to ensure their actions converge along the lines of the responses adopted by ESMA and also to UCITs management companies by providing clarity as to the content of the Guidelines.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
