ESMA Guidelines on Performance Fees
23/11/20
In brief
The European Securities and Markets Authority (ESMA) published on 3 April 2020 its final guidance on Performance Fees which is applicable to UCITS and certain types of AIFs (i.e. AIFs distributed to retail investors, excluding Closed Ended AIFs, as well as Open Ended Private Equity and Real Estate AIFS).
On 5 November 2020, ESMA released the final version of these guidelines, and the different translations related thereto. The publication of these translations triggered a two-month period during which the National Competent Authorities (NCAs) must notify ESMA whether they intend to comply with the guidelines and if not, the reasons behind the refusal.
The guidelines will apply from the end of this two-month period, as from 6 January 2021.
In detail
The application date of the guidelines on Performance Fees begins as of 6 January 2021, two months after 5 November 2020, when the translations were published on the ESMA website.
These are the following transitional provisions:
- for existing funds: by the beginning of the next financial year, following six months from the application date of these Guidelines;
- for new funds: immediately after the application date of these Guidelines.
As an example:
Closing date of the investment funds |
Date when the ESMA guidelines will become applicable |
As at 31 December: |
As from 1 January 2022 |
As at 31 March: |
As from 1 April 2022 |
As at 30 June: |
As from 1 July 2022 |
As at 30 September: |
As from 1 October 2021 |
Our expectation is that CSSF will confirm the adoption of the guidelines on Performance Fees published on 3 April 2020 as they stand.
We can help you to be compliant with these guidelines, as well as on any other subjects related to Performance Fees.
