ESMA · ESMA_QA_1107 Answer Published

ESMA’s guidelines on ETFs and other UCITS issues - Secondary market

Regulation
Undertakings for Collective Investment in Transferable Securities Directive (UCITS) Directive 2009/65/EC
Topic
ETFs
Submitted
2013-07-11
Answered
2013-07-11
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Question

When the UCITS ETF is open for direct redemptions, should UCITS management companies arrange the redemptions directly with secondary market investor of the UCITS ETF?

Answer

[ESMA 34-43-392 UCITS Q&A, section 3, Q&A 3b] In most cases, UCITS ETFs do not have a direct relationship with secondary market investors of UCITS ETFs. Therefore, UCITS management companies are not required to be directly in contact with the secondary market investors of the UCITS ETF but should make sure that appropriate processes are in place in order to allow direct redemptions when needed. In this context, the reference to unit-holders in Article 92 of the UCITS Directive should be understood as including secondary market investors of UCITS ETFs.
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This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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