ESMA: Article 50(2)(a) of Directive 2009/65/EC (UCITS Directive)

ESMA has published an opinion on the interpretation of the above. It concludes that Article 50(2)(a) refers only to investments in transferable securities and money market instruments and not to units or shares of collective investment undertakings. In Article 50(1), only sub-paragraphs (a) to (d) include the expression “transferable security” and only sub-paragraph (h) includes the expression “money market instruments”. It follows that Article 50(2)(a) provides for a derogation from sub-paragraphs (a) to (d) and sub-paragraph (h) of Article 50(1), and not from sub-paragraph (e). ESMA’s opinion is that UCITS may only invest in units or shares of collective investment undertakings as defined in Article 50(1)(e) of the UCITS Directive. ESMA expects that any portfolio adjustments required to ensure compliance with this opinion will be made taking into account the best interests of investors and at the latest by 31 December 2013.