ESMA publishes follow-up report on Guidelines on ETFs and UCITS issues

On 6 June 2023, ESMA published a follow-up report (the Report) to its 2018 peer review on the Guidelines on ETFs and other UCITS issues.

Although the Report finds that the NCAs have strengthened their supervisory practices, it highlights that there are still concerns in relation to the level of costs for some UCITS using Efficient Portfolio Management techniques.

In particular, the Report assessed how and whether the BaFin in Germany, the Estonian Financial Supervision Authority (EFSA), and the CSSF in Luxembourg have improved their practices following the findings and recommendations of the 2018 peer review.

ESMA also assessed the supervisory work carried out by the AMF in France, BaFin, the Irish Central Bank, and the CSSF in relation to the attribution of revenues and costs derived from securities lending activities by UCITS.

What happens next?

ESMA expects the NCAs to continue monitoring the effective application of the Guidelines and the effectiveness of the supervisory practices implemented. ESMA suggested that further work notably in the areas of costs, fees and revenues for Efficient Portfolio Management Techniques and Instruments could continue at EU level.

See our Insights Articles on ESMA’s Common Supervisory Action on the supervision of costs and fees of UCITS across the EU and the final report of its findings.