ESMA guidelines on ETFs and other UCITS issues implemented into Luxembourg law

On 18 December 2012, ESMA published its final set of guidelines on ETFs and other UCITS issues (the “Guidelines”), consolidating the guidelines on ETFs and other UCITS issues and the guidelines on repo and reverse repo agreements, respectively adopted in July and December of last year.

Following the lead by the Central Bank of Ireland, the CSSF in Luxembourg has adopted these European recommendations in full. The Guidelines contain significant new disclosure requirements and UCITS that are affected will have to update their prospectus, key investor information document and marketing communications to ensure that they are compliant with the new requirements.

All existing Luxembourgish UCITS must comply with the Guidelines within twelve months of their publication i.e. prior to 18 February 2014 whereas new structures created after 18 February 2013 will be required to comply with the Guidelines immediately.

The Guidelines are likely to have an impact on investment policies of many UCITS and in particular on those using intensively efficient portfolio management techniques, OTC derivatives such as swaps and financial indices.

During the transitional period of twelve months, should you wish to ascertain whether your current fund documentation needs updating and your products adjusting, please feel free to contact us.

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