ESMA · ESMA_QA_964 Answer Published

Performance reference period in case of funds’ mergers

Regulation
Undertakings for Collective Investment in Transferable Securities Directive (UCITS) Directive 2009/65/EC
Topic
Costs and fees
Submitted
2021-05-01
Answered
2021-05-01
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Question

How should the performance reference period be set in case of a merger where the receiving UCITS is a newly established fund with no performance history and it is in effect a continuation of the merging UCITS?

Answer

[ESMA 34-43-392 UCITS Q&A, Section 11, 4a] In order to ensure that the merger is not conducted with the aim of resetting the performance reference period [1] , in the case of a merger where the receiving UCITS is a newly established fund with no performance history and the competent authority of the receiving UCITS assesses that the merger does not substantially change the UCITS’ investment policy, the performance reference period of the merging UCITS should continue applying in the receiving UCITS. [1] This is defined as “the time horizon over which the performance is measured and compared with that of the reference indicator, at the end of which the mechanism for the compensation for past underperformance (or negative performance) can be reset”.
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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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