Esma launches joint review of fund fees

On the 01/06/21 at 3:18PM


Tuba Raqshan

Esma, along with other national regulators, will undertake supervisory action in 2021 on the costs and fees charged by the fund managers.

The European Securities and Markets Authority (Esma), the EU securities markets regulator, is launching a Common Supervisory Action (CSA), along with other national competent authorities (NCAs) on the supervision of costs and fees of funds across the European Union (EU).

The supervisory action will be conducted during 2021 and will assess the compliance of supervised entities with relevant cost related provisions in the UCITS framework and the obligation of not charging investors with undue costs. The supervision will also include entities employing Efficient Portfolio Management (EPM) techniques to assess if they adhere to the requirements set out in the UCITS framework and ESMA’s guidelines on ETFs and other UCITS issuances.

Esma has developed a common methodology and the national regulators would jointly carry out comprehensive supervisory action in a convergent manner. Throughout 2021, the NCAs will share knowledge and experiences through ESMA to ensure supervisory convergence on how they supervise cost-related issues and ultimately, enhance the protection of investors across the EU.

This action to supervise fund costs is an integral part of the EU securities’ regulator on the cost of retail investment products and improve investors’ confidence in the financial markets and reducing costs associated with buying financial products.