On 9 January 2015, ESMA published an updated version of its Q&A on its guidelines on ETFs and other UCITS issues. In summary
- "Question 5: Financial derivative instruments" specifies that if the role of counterparty to a financial derivative instrument only involves implementing a set of rules agreed in advance with the UCITS, such arrangement shall not be constitutive of investment management delegation.
- "Question 6: Collateral management" specifies that the requirement of Article 50(e) (iv) of the UCITS Directive(1) implies that a UCITS can reinvest cash collateral only in short-term money market funds that invest themselves not more than 10% of their assets in other money market funds.
*******
(1) UCITS Directive refers to Directive 2009/65/EC of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS).
