On 23 May 2023, the European Securities and Markets Authority (ESMA) initiated a consultation process on draft regulatory technical standards (RTS) under the amended European Long-Term Investment Funds (ELTIF) Regulation.

The consultation is part of ESMA’s mandate to provide the European Commission with RTS further clarifying the revamped ELTIF Regulation. The proposed provisions are comprehensive, encompassing:

  • Criteria for establishing circumstances where the use of financial derivative instruments serves solely for hedging purposes;
  • Circumstances that align the life of an ELTIF with the life-cycles of each of its individual assets, as well as different features of the ELTIF’s redemption policy;
  • The circumstances for the utilization of the matching mechanism, allowing for full or partial matching of transfer requests of units or shares of the ELTIF by exiting investors with transfer requests by potential investors;
  • Criteria to be used for certain elements of the schedule for the orderly disposal of the ELTIF assets; and
  • Cost disclosure.

Interested stakeholders are invited to provide input by 24 August 2023. ESMA aims to submit the final report and draft RTS to the European Commission by 10 January 2024.

A copy of the ESMA consultation paper dated 23 May 2023 can be accessed here.

Additional details about the revised ELTIF regulation can be found in our publication titled “ELTIFs and Luxembourg ELTIF structures“.

Please feel free to reach out to our investment management team if you would like further information regarding the ELTIF regulation or wish to establish an ELTIF.