JoŽlle Hauser (Partner), Caroline Migeot (Counsel) and Alfred Sawires (Counsel)
The European Securities and Markets Authority (ESMA)'s consolidated Guidelines on ETFs and other UCITS issues (Guidelines)1 entered into force on 18 February 2013. On the same day, the Commission de Surveillance du Secteur Financier (CSSF) published its Circular 13/559 incorporating the Guidelines into its supervisory practice. In addition, ESMA published Questions and Answers (Q&A) om 15 March 2013 (updated on 11 July 2013) on the practical application of the Guidelines.
The Guidelines introduce disclosure and documentation requirements as well as a number of new substantive requirements applicable to UCITS ETFs and other UCITS, index-tracking by UCITS, the use of efficient portfolio management (EPM) techniques and over-the-counter (OTC) derivatives by UCITS, the management of collateral received by UCITS in this context, and the eligibility of financial indices for investments by UCITS.