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ALFI responded to the European Securities and Markets Authority (ESMA) discussion paper, setting out policy orientations on guidelines for UCITS exchange-traded funds (ETFs) and structured UCITS. The UCITS regime has the merit of being a unified regime and it would not be appropriate to modify this. Furthermore, creating different categories of UCITS might undermine confidence in the global UCITS brand and damage its competitiveness, especially outside the European Union.
The proposed ESMA policy orientations also suggest additional disclosure to such UCITS investors. ALFI believes that this increased transparency is in line with the market best practice and welcomes such proposals.
ALFI nevertheless suggests that ESMA should consider extending these requirements to non-UCITS ETFs and structured products currently offered to retail investors and requiring that these non-UCITS products are clearly flagged from the UCITS one. When considering investor protection and disclosure, ALFI strongly encourages ESMA to take a horizontal approach to funds and non-fund products alike, in the spirit of MiFID and of the PRIPs initiative. Any consideration regarding the marketing of ETFs cannot be dissociated from a review of other products which are also subject to MiFID, therefore any action should be taken within the MiFID Review, maintaining a level playing field vis-à-vis other financial instruments.