UCITS KIID Benchmark Disclosures - The CSSF's Expectations

On 27 January 2020, the CSSF published a press release in which it reminded UCITS management companies and self-managed UCITS that their KIIDs needed to include the necessary changes required to comply with the disclosure obligations regarding the reference to benchmark(s) and inclusion of such benchmarks in the past performance chart introduced by the updated ESMA Q&A dated 29 March 2019 no later than at the annual update of the UCITS KIID which is to take place on 19 February 2020.

The CSSF has confirmed that the updated UCITS KIIDs have to be filed with the CSSF via the usual transmission channel. This confirms that updated KIIDs will not be pre-approved by the CSSF and need to be uploaded to the CSSF system according to the usual procedure.

The CSSF has further reminded market participants that in this context the following information must be included in the UCITS KIID:

a clear indication whether the strategy of the UCITS is active (actively managed) or passive (passively managed); an indication of the benchmark index (or indices) the UCITS is tracking or making reference to in order to provide investors with an indication of how actively the UCITS is managed; a disclosure on the use of the benchmark, the degree of freedom from the benchmark and the past performance against the benchmark. One should note that, in particular, the third requirement mentioned above raised questions in the industry as the notion of "use" may...