Qi Qi Dong January 20, 2022
In January 2022, the European Securities and Markets Authority (ESMA) initiated a Common Supervisory Action (CSA) in collaboration with National Competent Authorities (NCAs) to assess the valuation practices of UCITS and open-ended Alternative Investment Funds (AIFs) across the EU. This initiative aimed to ensure that fund managers adhere to valuation-related provisions outlined in the UCITS and AIFMD frameworks, particularly concerning less liquid assets such as unlisted equities, unrated bonds, corporate debt, real estate, high-yield bonds, emerging markets, infrequently traded listed equities, and bank loans.
The CSA focused on evaluating whether fund managers have implemented robust valuation policies and procedures that accurately reflect the true value of their assets under both normal and stressed market conditions. By employing a common assessment framework, ESMA and NCAs aimed to promote consistent supervisory practices and enhance investor protection across the EU.
Throughout 2022, NCAs conducted supervisory activities, sharing insights and experiences to foster convergence in supervising valuation-related issues. This collaborative effort underscores ESMA’s commitment to maintaining the integrity of financial markets and ensuring that investors receive fair and accurate information regarding their investments.
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