Regulatory Focus On Costs And Fees

June 2023

On 24 March 2023, the Central Bank of Ireland ("Central Bank") published a letter setting out its findings arising from the European Securities and Markets Authority ("ESMA") coordinated common supervisory action ("CSA") on costs and fees, and requiring all firms managing UCITS and AIFs to develop a plan to address any gaps in their arrangements. ESMA previously reported its high level findings from the CSA in May 2022. While the CSA focused on UCITS' managers compliance with the cost-related provisions contained in the UCITS framework – which includes a requirement that undue costs should not be charged to the UCITS and its unitholders – the Central Bank has stated that its expectations should also be considered by AIFMs with respect to costs and fees charged to AIFs.