ESMA Question and Answer Updates on How to Apply AIFMD and UCITS

On the 6^th of April, the European Markets and Securities Authority (ESMA) published updates to their Question and Answer documents in relation to both the Directive relating to Undertakings for Collective Investment in Transferable Securities Directive (UCITS) and the Alternative Investment Fund Managers Directive (AIFMD).

The objective of updating this document was to encourage similar supervision structures and implementation measures across both AIFM and the UCITS regimes within the European Union. The main developments with these updates are summarised in the following three points:

1. A new AIFMD Q&A regarding the cross-border marketing of AIF. The addition states that the AIF marketing passport can only be used for marketing to professional clients.
2. A new UCITS Q&A regarding the cross-border undertakings by management companies. It states that these companies may notify the regulator of activities without identifying a specific UCITS.
3. The consolidation of several areas of guidance related to UCITS including:

• Details concerning the information sharing between competent authorities
• The authority’s guidance on exchange traded fund and other issues
• Notification information
• Risk measurements
• Key Investor Information Documents (KIID)
• Calculation of global exposure and risks to counterparties

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