Investment Funds Update: ESMA Publishes Discussion Paper On UCITS Share Classes

The European Securities and Markets Authority (“ESMA”) has published a second discussion paper on the topic of UCITS share classes (the “Discussion Paper”), proposing a number of high-level and operational principles to form the basis of a regulatory framework for all UCITS share classes.

ESMA has used the feedback received from its December 2014 discussion paper, together with input provided through engagement by ESMA with relevant stakeholders, to further develop its proposed framework. While the December 2014 consultation proposed non-exhaustive lists of permissible and prohibited differentiation at share class level, the Discussion Paper proposes a principles-based approach and requests feedback on whether and how share classes could actually work under the principles outlined in the Discussion Paper.