ESMA Findings On Costs And Fees CSA

Following on from the common supervisory action ("CSA") on costs and fees in UCITS carried our during 2021, the European Securities and Markets Authority ("ESMA") has published a report setting out its findings. The main results of the CSA, which focused in particular on the obligation not to charge investors with undue costs, are set out below.

• There is room for improvement with respect to the application of the ESMA supervisory briefing of June 2020 on the supervision of costs in UCITS and alternative investment funds ("AIFs"), particularly for smaller management companies. ESMA reiterates the importance for all UCITS managers to have in place a structured and formalised pricing process (as emphasised in the supervisory briefing). The application of the proportionality principle should not result in smaller UCITS managers effectively dis-applying the requirements altogether.