Regulation Tomorrow Podcast | Claim token: 88161000-eb00-11f0-90b1-918c2901f3c9 Let’s talk asset management: Episode 19 – ESMA’s Final Report on the UCITS Eligible Assets Directive
Aug 5, 2025
Frank Herring, a senior consultant at Norton Rose Fulbright, dives into the nuances of the European Securities and Markets Authority’s Final Report on the UCITS Eligible Assets Directive. He discusses the proposed changes to investment criteria, weighing the broadened definition of transferable securities against potential risks for retail investors. The conversation also delves into the new look-through approach's impact on investment instruments and addresses the evolving liquidity and valuation standards that could reshape asset management practices.
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Look-Through Will Narrow Transferable Securities
- ESMA proposes a look-through approach that narrows what counts as a transferable security under the Eligible Assets Directive.
- That would prevent wrappers like Delta One certificates from turning ineligible assets into eligible ones.
Fund Shares May Lose Eligible Status
- ESMA's look-through would also treat investments in other funds as transparent to their underlying assets.
- That could make shares in closed-ended or open-ended funds ineligible if their underlying holdings are not UCITS-eligible.
German Pension Fund Example
- Frank gives a German pension fund example to show practical impact on distribution structures.
- The example shows why master-feeder or master fund structures could become unusable for accessing non-UCITS assets.