ESMA updates Q&As on AIFMD and UCITS

The updated [Q&As on the application of AIFMD include a new Q3 in Section II (Notification of AIFs), the answer to which states that, where an EU AIF offers additional fund units and limits this offer to investors already invested in the AIF, the AIFM does not need to submit a new notification to the national competent authority in accordance with Article 31(2) of AIFMD.

The updated Q&As on the application of the UCITS Directive also include a new Q1a to Q2 (Master-feeder structures) under Section 1 - General, clarifying that UCITS cannot invest in other UCITS feeder funds.

The rationale for this is that UCITS feeder funds have to invest at least 85% of their net assets in their UCITS master fund. Under Article 50(1)(e)(iv) of the UCITS Directive, a UCITS can only invest in other UCITS if no more than 10% of the UCITS’s assets or of the other collective investment undertakings, whose acquisition is contemplated, can, according to their fund rules or instruments of incorporation, be invested in aggregate in units of other UCITS or other collective investment undertakings.