On 25 May 2018, ESMA issued a new UCITS Q&A guidance paper with just one new question/answer.

It says that remuneration related disclosure requirements for UCITS annual accounts should also apply to the staff of any delegates of the UCITS/management company to whom investment management functions have been delegated.

The guidance mirrors guidance issued by ESMA in its AIFMD Q&A on 5 October 2017.

It therefore aligns ESMA's position for UCITS and AIFs. No explanation is given on why there was a seven month gap between the two pieces of guidance.

The questions industry was already wrestling within this area on the AIF side will now apply on the UCITS side also.

A few of these are: (i) When should funds begin to comply? (ii) Can a literal interpretation be given to the reference of remuneration paid by a management company to the staff of a delegate?; and (iii) What are the implications of not complying with this guidance?

Given that UCITS represent significantly more funds than AIFs (both in terms of number of funds and asset levels), it is likely these questions will receive increased focus as industry digests this new guidance.

{The Q&A document includes one new question and answer on: the application of remuneration disclosure requirements to staff of the delegate of an UCITS management company to whom investment management functions have been delegated