Launch of the ESMA Common Supervisory Action on the supervision of costs and fees of UCITS
On 6 January 2021, the European Securities and Markets Authority (ESMA) launched, in accordance with the announcement hereafter, a Common Supervisory Action (CSA) with national competent authorities (NCAs) on the supervision of costs and fees of UCITS across the European Union:
The methodology of this CSA has been developed by ESMA and aims to ensure a common supervisory approach among NCAs.
The aim of the CSA on costs and fees is to assess the compliance of supervised entities with the relevant cost-related provisions in the UCITS framework and the obligation of not charging investors with undue costs. For this purpose, the NCAs will take into account the supervisory briefing on the supervision of costs published by ESMA in June 2020. This supervisory briefing is designed to provide guidance to NCAs as regards the supervision of how costs are charged to investors by UCITS and their managers. It is also meant to give market participants indications of NCAs’ expectations and compliant practices regarding the cost-related provisions of the UCITS frameworks.
The CSA will also cover entities employing Efficient Portfolio Management (EPM) techniques to assess whether they adhere to the requirements set out in the UCITS framework and ESMA Guidelines on ETFs and other UCITS issues (ESMA/2014/937).
In this context, the CSSF will launch beginning of March 2021 the first phase of the CSA by asking a sample of Luxembourg-based UCITS managers to complete a dedicated questionnaire for all UCITS managed, i.e. Luxembourg domiciled UCITS and foreign domiciled UCITS. All concerned Luxembourg-based UCITS managers will be contacted by the CSSF shortly in that context.
In order to benefit from a secured exchange platform and pre-submission data quality checks, the response questionnaire will have to be submitted by the UCITS managers through the CSSF’s eDesk Portal. For that purpose, a dedicated section to complete this questionnaire will be accessible on the eDesk Portal.
The industry will be duly informed once this section, together with additional guidance, will be available for use. Any complementary guidance from ESMA that may become available in that context will also be included in that user guide and updated accordingly.