30 January 2012

IMA: ESMA's UCITS proposals should apply to all exchange-traded products

The European Securities and Markets Authority's (ESMA) proposed guidelines on ETFs and other UCITS issues take on board a number of points made by the IMA (Investment Management Association) to improve the clarity and consistent implementation of UCITS rules across the EU.

Responding to the proposals, Julie Patterson, IMA Director of Authorised Funds and Tax, said: “We agree with ESMA’s proposed guidelines for all UCITS funds to improve disclosure and to tighten rules on collateral, stock lending and use of ‘strategy’ indices. For UK-authorised funds similar rules are already in place. In addition, in the UK the independent depository has duties of oversight. We urge national regulators across the EU to adopt the UK’s approach to investor protection and to apply the UCITS rules and final guidelines consistently. The European Commission’s Packaged Retail Investment Products initiative seeks to ensure that all retail products are subject to similar rules on disclosure and selling, but we are concerned that this important principle will be eroded if different pieces of legislation apply to different products. In particular, the issues highlighted by ESMA are relevant to all exchange-traded products, not just exchange-traded UCITS. We recognise that regulators remain concerned that some retail products are overly complex, but complexity does not necessarily equate to risk. Sophisticated investment strategies can maximise returns while minimising risk. Removing so-called complexity could lead to investors not having access to the investment returns they seek within the UCITS framework.”

Press release

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