On 23 December 2014, the European Securities and Markets
Authority ("ESMA") published a
discussion paper on UCITS share classes (the
"Discussion Paper") in which it has set
out its views on what constitutes a UCITS share class; how to
distinguish UCITS share classes from sub-funds of UCITS; and
possible approaches to share class differentiation.
ESMA notes that, while the UCITS directive recognises the
possibility for a UCITS to offer more than one share class to UCITS
investors, it does not prescribe whether, and to what extent, share
classes within a given UCITS / UCITS sub-fund can differ from
eachother. The context for the Discussion Paper is the
identification by ESMA of diverging national practices regarding
the types of share class differentiation permitted, ranging from,
for example, share classes with different levels of fees to share
classes with potentially different investment strategies. Arising
from this, ESMA states that there is merit in developing a
