ESMA’s technical standards for European Long-Term Investment Funds.

On 8 June 2016, ESMA published their draft regulatory technical standards (“RTS”) for the European Long Term Investment Fund (“ELTIF”) regime. An ELTIF is an Alternative Investment Fund (“AIF”) that must be managed by an Authorised Fund Manager (“AIFM”) under AIFMD. Subject to certain conditions, the ELTIF regime will allow fund managers to have access to investors across the EU, including retail investors.

Annex III of the RTS sets out the following information in relation to ELTIFS:

  • the criteria for establishing the circumstances in which the use of financial derivative instruments are used solely for hedging purposes by taking into account trades in both financial derivative instruments and assets;
  • the circumstances in which the life of an ELTIF is considered sufficient in length;
  • the criteria to be used for the disposal of ELTIF assets; and
  • the facilities available to retail investors.

Within three months, the European Commission should take a decision on whether to endorse ESMA’s RTS.

The full report can be found here:

https://www.esma.europa.eu/sites/default/files/library/2016-935_final_report_on_eltif_rts.pdf

Should you require any advice or information on the ELTIF regime or AIFMD, Cleveland & Co, your external in-house counsel, are here to help.

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