CSSF Circular 13/559 And ESMA's Q&A Relating To ESMA's Guidelines On ETFS And Other UCITS

On February 18th 2013 the CSSF published Circular 13/559 (the "Circular") relating to the guidelines (the "Guidelines") of the European Securities Market Authority on ETFs and other UCIT's issues (ESMA/2012/832).

The aim of the Circular is to implement into Luxembourg regulation the Guidelines which entered into force on February 18th 2013. In addition, the Circular provides an overview of the main provisions of the Guidelines.

For further information on the Guidelines please see our newsletters of September 2012 and January 2013.

Any new UCITS created after February 18th 2013 should comply with the Guidelines immediately.

UCITS that exist before February 18th 2013 and that invest in financial indices that do not comply with the Guidelines should align their investments with the Guidelines by February 18tth 2014.

Structured UCITS that exist before February 18tth 2013 are not required to comply with the Guidelines provided that they do not accept any new subscriptions after February 18tth 2013. However, in order to be able to continue offering the underlying payoff to existing investors, such existing UCITS can actively manage their financial contracts.

UCITS that exist before February 18th 2013 should align their portfolio of collateral with the Guidelines by February 18th 2014. However, any reinvestment of cash collateral after February 18th 2013 should comply with the Guidelines immediately.

UCITS that exist before February 18th 2013 and that have entered into revenue sharing arrangements should comply with the disclosure requirements applicable to such arrangements by February 18tth 2014.

UCITS ETFs that exist before February 18th 2013 are not required to comply with Guidelines relating to identifiers until the earlier of:

the first occasion after February 18th 2013 on which the name of the fund is changed for another reason; and February...