UNDERTAKINGS IN COLLECTIVE INVESTMENTS AND TRANSFERRABLE SECURITIES ("UCITS")
(i) Irish Funds letter to the Central Bank regarding UCITS V Depositary Agreements
On 13 October 2016, Commission Delegated Regulation (EU) 2016/438 regarding the obligations of UCITS funds, their relevant management companies and their depositaries (the "Delegated Regulation") came into effect.
The Delegated Regulation, supplementing the UCITS V Directive, provides further detail on the obligations imposed on depositaries under UCITS V and includes certain elements that must be included in depositary agreements.
On 10 October 2016, Irish Funds submitted a letter to the Central Bank regarding Depositary Agreements subject to UCITS V. Irish Funds state that given the volume of UCITS V depositary agreements for completion, and having regard to some of the other amendments which have been required to be made to fund documentation, there were a number of cases where the relevant depositary agreement had not yet been cleared of comment and in some instances not filed.
In the letter, Irish Funds advised that any outstanding depositary agreements which address the Delegated Regulation will be filed with the Central Bank as soon as practicable and that where the Central Bank is already aware of the status of a depositary agreement, as a result of submissions already made with the Central Bank, no further notification will be made via the Central Bank ONR system.
(ii) ESMA updates to Q&A on application of UCITS Directive
During the quarter, ESMA published two updated versions of its Q&A paper on the application of the UCITS Directive (2009/65/EC) as recently revised by UCITS V (2014/91/EU), the first on 12 October 2016 and the second version on 21 November 2016. The Q&A aims to promote common supervisory approaches and practices in the application of the UCITS Directive and its implementing measures. UCITS V introduces rules on remuneration policies and sanctions and strengthens the depositary regime.
The Q&A published on 12 October 2016 clarifies the following:
Section I Question 3 - A multi-lateral trading facilities ("MTF") operating in the EU can be considered to be a "regulated market" for the purposes of the UCITS Directive provided that certain requirements are complied with including that the MTF constitutes an MTF as defined in Article 4(1)(15) of MiFID Directive 2004/39/EC and operates regularly, is open to the public and is recognised.
Section II Question 7 - Information on remuneration which is posted on a UCITS website as required under UCITS V need not be translated and can be provided in English;
Section III Question 6(o) - Where a UCITS invests cash collateral which it receives in short term money market funds, those short term money market funds should be taken into account when complying with limits imposed on the UCITS with respect to investment in other funds; and
Section VII Question 1 - This question deals with the reporting obligation under the Regulation on...