ESMA_QA_1139

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1139

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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: UCITS eligible assets and investment restrictions

Subject Matter: KIID Collateral management

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Question

Submission Date: 01 October 2016

Paragraph 43(e) refers to “a basket of collateral with a maximum exposure to a given issuer of 20% of its net asset value”. Does this diversification requirement refer to the basket of collateral or to the net asset value of the UCITS?

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ESMA Answer

Answer Date: 01-10-2016

[ESMA 34-43-392 UCITS Q&A, section 3, Q&A 6f] The diversification refers to the net asset value of the UCITS. Therefore, collateral received should be diversified so that exposure to any issuer does not exceed 20% of the net asset value of the UCITS. This means that where the amount of collateral received by a UCITS does not exceed 20% of its net asset value, the collateral can be issued by a single issuer.

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