ESMA publishes follow-up report to the peer review on the Guidelines on ETFs and other UCITS issues

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published its follow-up report to the peer review on the Guidelines on ETFs and other UCITS issues.

The report shows that the National Competent Authorities (NCAs) have strengthened their supervisory practices, enhanced internal and external guidance, and performed supervisory work in the area of Exchange-traded funds (ETFs) and other Undertakings for Collective Investment in Transferable Securities (UCITS) since 2018.

At the same time, ESMA notes that there are still concerns in relation to the level of costs for some UCITS using Efficient Portfolio Management techniques.

The report assessed if BaFin (DE), EFSA (EE), and CSSF (LU) improved their practices based on the 2018 peer review findings and recommendations. ESMA also assessed the supervisory work carried out by the AMF (FR), BaFin (DE), CBoI (IE), and CSSF (LU) in relation to the attribution of revenues and costs derived from securities lending activities by UCITS.

Next steps
NCAs are expected to continue monitoring the effective application of the Guidelines and the effectiveness of the supervisory practices implemented taking supervisory action when needed. Further work notably in the areas of costs, fees and revenues for Efficient Portfolio Management Techniques and Instruments could continue at EU level.

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