European Securities and Markets Authority Consults on Costs Disclosure Standards for Fund Managers

The European Securities and Markets Authority has launched a consultation on its draft Regulatory Technical Standards for costs disclosure requirements under the European Long-Term Investment Fund Regulation. The consultation is relevant to ELTIF managers, alternative investment funds managers and institutional and retail investors investing into ELTIFs. Responses to the consultation should be supplied by June 29, 2019.

The ELTIF Regulation requires all units or shares of an ELTIF to be marketed in conjunction with a prospectus and further that prospectuses prominently inform investors of the level of different costs borne directly or indirectly by investors. ESMA is mandated to produce RTS specifying the common definitions, calculation methodologies and presentation formats of these costs and the overall ratio of the costs to the capital of the ELTIF. ESMA’s consultation contains the draft Regulatory Technical Standards proposed by ESMA, together with a series of questions for respondents. ESMA notes that, in developing the RTS, the ELTIF Regulation requires it to take into account the RTS for key information documents required under the Packaged Retail and Insurance-based Investment Products Regulation, with particular reference to the RTS provisions governing the presentation and content of the information in the KID and the methodology for calculating costs associated with an investment in the PRIIP. These RTS were published in April 2017 but are due to be revised in the course of 2019. ESMA therefore considers it prudent to consult with stakeholders on the ELTIF RTS in anticipation of the publication of the revised PRIIPs RTS.

View ESMA's consultation paper on costs disclosure standards.

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