In view of the forthcoming application of the UCITS V Directive on 18 March 2016, ESMA has published an updated ESMA UCITS Q&A document on the 1st February 2016 including new questions on the additional documents that funds are required to provide in line with the UCITS V requirements.
The updated ESMA UCITS Q&A consolidates in a single document all Q&As relating to the application of the UCITS Directive therefore repealing and replacing the four existing ESMA Q&As on UCITS:
- The Key Investor Information Document (KIID) for UCITS (2015/631);
- Q&A on ESMA’s guidelines on ETFs and other UCITS issues (2015/12);
- Notification of UCITS and exchange of information between competent authorities (2012/428); and
- Risk Measurement and Calculation of Global Exposure and Counterparty Risk for UCITS (2013/1950).
KIID & Prospectus Updates
In view of the deadline transposition of UCITS V by the 18 March 2016, current UCITS funds need to ensure that the documentation is duly updated in line with the remuneration and depository requirements set out therein. The ESMA UCITS Q&A outlines that UCITS will not be required to update its KIID with a prescribed statement in relation to remuneration policy by the 18 March 2016 but will be permitted to update it at the next annual update thereafter or on the first occasion when the KIID is replaced. Likewise with respect to the prospectus where the relevant information can be added at the next revision, latest by 18 March 2017. UCITS management compnaies are however bound to make avialable on the website the additional information on the remuneration arrangments as soon as it becomes available.
Annual Report
With respect to the inclusion of the remuneration related information in the annual report which relates to periods that end on or after the transpostion deadline, but before its first annual performace period, the ESMA UCITS Q&A requires that such information should be reported on a best efforts basis, explaining the basis for any omission.
Depositary Contracts
The UCITS depositary contracts are required to be revised promptly to include the required particulars in accordance with the transitional arrangements outlined in the Level 2 measures. Particular care should be taken with respect to the depositary liability provisions which, when in conflict with the UCITS V provisions, will become void from 18 March 2016.
The updated ESMA UCITS Q&A can be viewed here.
