Regulatory Alerts2023-05-17
ESMA Opinion on Undue Costs of UCITS and AIFs
The European Securities and Markets Authority (ESMA) proposes legislative clarifications to the UCITS Directive and AIFMD to define the notion of undue costs and strengthen the legal basis for national competent authorities to enforce compliance. The opinion recommends that fund managers implement structured pricing processes, conduct due diligence to ensure costs meet market standards, and explicitly reimburse investors for any unduly charged fees. Additionally, ESMA suggests empowering the Commission to adopt regulatory technical standards that specify circumstances for undue costs and allow national authorities to impose proportionate sanctions for infringements.
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