ESMA_QA_729

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/729

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Regulatory Context

Regulation : BMR

Level 1 Regulation: Benchmarks Regulation (BMR) - Regulation 2016/1011

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Benchmarks Regulation

Subject Matter: Definition of a benchmark in relation to investment funds (ESMA70-145-114 Q&A_5.4)

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Question

Submission Date: 29 March 2023

What types of investment funds are considered to be using an index for the purpose of “tracking the return of [an] index”?

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ESMA Answer

Answer Date: 05-02-2018

Article 3(1)(3) of the BMR defines a benchmark, inter alia, as an index that is used to measure the performance of an investment fund with the purpose of tracking the return of such index. ESMA considers that investment funds using indices to measure their performance with the purpose of tracking the return of such indices include:

investment funds the strategy of which is to replicate or track the performances of an index or indices e.g. through synthetic or physical replication; and structured investment funds that provide investors with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of indices.

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This document was automatically extracted from the ESMA EMIR Q&A database.