26/05/2015
ESMA proposes a change to UCITS directive
p { margin-bottom: 0.25cm; line-height: 120%; } ESMA on 22 May published an opinion on the impact of EMIR on UCITS funds. In the document, ESMA expresses support for a modification to the UCITS directive, to take into account obligations for certain types of over-the-counter derivative transactions to be settled through EMIR. Taking into account this settlement obligation, the question of calculation of the counterparty risks for UCITS funds for OTC derivatives sbject to central counterparty is raised. The question of whether UCITS funds are required to apply the same constraints to OTC derivatives which are subject to central counterparty as to derivative instruments traded on regulated markets (ETD) also arises. From the point of view of ESMA, the UCITS directive should not take this distinction into account between OTC derivatives and publicly-traded derivatives. The distiction to draw should instead be between compensated and non-compensated derivatives. For OTC derivative transactions which are subject to central compensation, ESMA finds that there are not grounds to modify the UCITS directive, and that it is suitable to continue to apply the terms of article 52 of the directive, concerning counterparty risks.
