The UCITS Directive recognises the possibility for UCITS to offer different share classes to investors but it does not prescribe whether, and to what extent, share classes of a given UCITS can differ from each other.
ESMA has identified diverging national practices as to the types of share class that are permitted, ranging from very simple share classes e.g. with different levels of fees, to much more sophisticated share classes e.g. with potentially different investment strategies. Therefore, ESMA sees merit in developing a common understanding of what constitutes a share class of UCITS and of the ways in which share classes may differ from each other.
In this discussion paper, ESMA sets out its views on what constitutes a share class, including how to distinguish share classes from compartments of UCITS. The paper goes on to provide possible approaches to the extent of differentiation between share classes that should be permitted.
ESMA will take into account the feedback from stakeholders with a view to establishing a common position on the use of share classes by UCITS. ESMA appreciates that national practices on the use of share classes vary significantly, and will take into account the possible impact on current market practices when developing its final position on this topic.
The closing date for responses to the paper is 27 March 2015.
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