Executive Summary
On 7 May 2024, the European Securities and Markets Authority (ESMA) published a Call for Evidence on the review of the Undertakings for Collective Investment in Transferable Securities (UCITS) Eligible Assets Directive (EAD). The objective of this call is to gather information from stakeholders to assess possible risk and benefits of UCITS gaining exposure to various asset classes.
The UCITS EAD being in force since 2007, the European Commission deems it important to take stock of the market practices to ensure that the eligibility rules are implemented in a uniform manner in all Member States, also taking into account market and regulatory developments. The Commission therefore has mandated ESMA to carry out an assessment of the implementation of the UCITS EAD in the Member States, to analyse whether any divergences have arisen in this area and to provide the Commission with a set of recommendations on how the UCITS EAD should be revised to keep it in line with market developments.
Interested stakeholders are invited to provide their feedback to ESMA on market practices and interpretation or practical application issues with respect to the eligibility criteria and other provisions set out in the UCITS EAD. ESMA is also interested in gathering insights on some key notions and definitions used in the UCITS EAD and their transversal consistency with other pieces of legislation in the EU Single Rulebook.
ESMA will consider all feedback received by 7 August 2024 Taking into account the evidence and views collected, ESMA will develop its technical advice to the European Commission by 31 October 2024.
Please contact James Delaney with any questions regarding these requirements.
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![James Delaney [273x154].jpg](https://www.aima.org/static/625e9fb9-44f6-4298-9e3d67433e4a908b/forewordteammember_80b0dbf3d3f0c9d3e58a379104f7efa7/James-Delaney-273x154.jpg)
James Delaney
Managing Director, Asset Management Regulation
Practical Implications
The Call for Evidence is divided into separate sections which seek to collect evidence on the following aspects of the ESMA mandate for technical advice:
- Convergence issues and clarity of key concept and definitions: ESMA aims to gather evidence and views from stakeholders on the clarity of key concepts and potential interpretation and convergence issues with the application of the UCITS EAD.
- Direct and indirect UCITS exposures to certain asset classes and related data collection/analysis: ESMA aims to assess possible risks and benefits of UCITS gaining exposures to asset classes on which there are divergent views as regards their eligibility as UCITS investments. This covers both direct and indirect exposures such as via so-called delta-one instruments, (embedded) derivatives and replication of financial indices.
Timeline
AIMA has categorized this proposal as Medium Priority/Medium Impact and it is therefore represented in mid-dark blue in the AIMA Regulatory Forecast gantt chart.
| Due date for ESMA technical advice to the Commission | October 31, 2024 | |
| AIMA submits response to ESMA's Call for Evidence | August 7, 2024 | |
| ESMA Call for Evidence on the review of the UCITS Eligible Assets Directive | May 7, 2024 | |
| Formal request to ESMA for technical advice on the review of Commission Directive 2007/16/EC on UCITS eligible assets | June 6, 2023 | |
| Commission Directive 2007/16/EC on UCITS eligible assets | March 23, 2007 |