ESMA report on the CSA on costs and fees for investment funds
ESMA published a report on the Common Supervisory Action on costs and fees for investment funds. The Common Supervisory Action (on UCITS) was carried out with National Competent Authorities during 2021. The issue of costs and performance of retail investment products was identified as one of the Union Strategic Supervisory Priorities in 2020.
Key takeaways include:
- the need for a structured and formalised pricing process
- the need for policies and procedures allowing a transparent identification and quantification of all costs charged to the fund, including those directly paid by the investors (such as entry and exit costs)
- the importance of an independent analysis of the fee structures (noting that an overreliance on the fee-structure provided by delegated portfolio managers should be avoided)
- a review of the fund's costs and fees should occur in correlation with the general annual performance review of the fund.
For further information in relation to this topic please contact any member of our Asset Management & Investment Funds team.
Date published: 22 July 2022