ESMA Guidelines On Repurchase And Reverse Repurchase Agreements

Introduction

On 25 July 2012, the European and Securities Markets Authority (ESMA) published guidelines for certain types of Undertakings for Collective Investment in Transferable Securities (UCITS), including UCITS Exchange-Traded Funds (ETFs), and other UCITS-related issues, referred to as the Guidelines on ETFs and Other UCITS Issues (the ETF Guidelines). The ETF Guidelines can be found here. The ETF Guidelines included a consultation paper on the recallability of repurchase and reverse repurchase agreements (the Consultation Paper).

Following a review of responses to the Consultation Paper from stakeholders including the Irish Funds Industry Association, ESMA published guidelines on repurchase and reverse repurchase agreements (the Repo Guidelines) on 4 December 2012. The Repo Guidelines can be found here. The aim of the Repo Guidelines is to protect investors by introducing requirements on the use of repurchase and reverse repurchase agreements by UCITS.