ESMA · ESMA_QA_1163 Answer Published
KIID Collateral management
- Regulation
- Undertakings for Collective Investment in Transferable Securities Directive (UCITS) Directive 2009/65/EC
- Topic
- UCITS eligible assets and investment restrictions
- Submitted
- 2016-10-12
- Answered
- 2016-10-12
Question
A UCITS has a clause in its fund rules limiting investment in units of other funds to 10%, in line with Article 50(1)(e)(iv) of the UCITS Directive. If, in accordance with paragraph 43 of the ESMA Guidelines on ETFs and other UCITS issues, this fund re-invests cash collateral in short-term money market funds, should this investment be included in the calculation when calculating the 10% limit?
Answer
[ESMA 34-43-392 UCITS Q&A, section 3, Q&A 6o] Yes. Investment of cash collateral in short-term money market funds should be treated in the same way as any other investment made by the UCITS in units of other UCITS or other collective investment undertakings and should be compliant with all the requirements of the UCITS Directive.
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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