ESMA Sets Out Supervisory Expectations on Publication of Investment Funds Reports

ESMA issued a public statement aimed at fund managers regarding their obligations to publish yearly and half-yearly reports in the context of the COVID-19 pandemic.

The entities concerned are the following:

• UCITS management companies;
• self-managed UCITS investment companies;
• authorized AIFMs;
• ·non-EU AIFMs marketing AIFs pursuant to Article 42 of the AIFMD;
• EuVECA managers; and
• EuSEF managers

The statement clarifies that ESMA expects NCAs to, when possible during this specific period, not prioritize supervisory actions against the above market participants in respect of the upcoming deadlines set out in the UCITS Directive, the AIFMD, the EuSEF Regulation and the EuVECA Regulation regarding:

• annual reports referring to a year-end occurring on or after December 31, 2019 but before April 1, 2020 for a period of two months following the relevant deadline;
• annual reports referring to a year-end occurring on or after April 1, 2020 but before May 1, for a period of one month following the relevant deadline; and
• half-yearly reports of UCITS referring to a reporting period ending on or after January 31, 2020 but before April 1, 2020 for a period of one month following the deadline set out in the UCITS Directive.

Additionally, ESMA has encouraged NCAs to apply a risk-based approach in respect of supervisory powers in their day-to-day enforcement of the publication deadlines of the reports listed above.

Nevertheless, where fund managers reasonably anticipate that publication of the reports will be delayed beyond the normal regulatory deadlines, they are still expected to inform their NCA promptly and to inform investors as soon as practicable of the delay, the reasons for this delay and, to the extent possible, the estimated publication date.

ESMA has taken this action in response to the difficulties and challenges fund managers and auditors may be experiencing in preparing their periodic reports for a publication, due to the confinement measures taken by Member States to prevent COVID-19 contagion.

ESMA will continue to closely monitor the situation and will take or recommend any measures necessary to mitigate the impact of COVID-19 on timely and appropriate periodic disclosure by fund managers in respect of the funds they manage or market.