ESMA_QA_1108

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1108

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Regulatory Context

Regulation : UCITS

Level 1 Regulation: Undertakings for Collective Investment in Transferable Securities Directive (UCITS) Directive 2009/65/EC

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Efficient portfolio management (EPM) techniques

Subject Matter: ESMA’s guidelines on ETFs and other UCITS issues - Efficient portfolio management techniques

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Question

Submission Date: 15 March 2013

According to the guidelines, all revenues arising from efficient portfolio management techniques, net of direct and indirect operational costs, should be returned to the UCITS. Does this mean that securities lending agents should not be paid for their services?

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ESMA Answer

Answer Date: 15-03-2013

[ESMA 34-43-392 UCITS Q&A, section 3, Q&A 4a] No. The guidelines do not prohibit the deduction from gross revenues arising from efficient portfolio management techniques of fees paid to securities lending agents as a normal compensation for their services in the context of such techniques. However, pursuant to paragraph 35 of the guidelines, the annual report of the UCITS should contain details on the revenues arising from efficient portfolio management techniques for the entire reporting period together with the direct and indirect operational costs and fees incurred.

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