On the 27 November 2013, ESMA published an updated Questions and Answers document in respect of the "ESMA's Guidelines on ETFs and other UCITS issues".
The updated Q&A included two new questions and answers.
The first related to collateral management and ESMA confirmed that when a UCITS fund reinvests cash collateral, the reinvested cash collateral has to be taken into account for the calculation of the issuer concentration limits laid down in the UCITS Directive (for example, the 20% of NAV limit that can be placed on deposit with an approved credit institution).
The second additional question dealt with the requirements related to acceptable financial indices. The original Guidelines stated that a UCITS fund should not invest in a financial index whose methodologies permitted retrospective changes to previously published index values ("backfilling"). In the updated Q&A, ESMA have confirmed that a financial index which permits retrospective changes due to calculation mistakes are not caught by this prohibition and, accordingly, a UCITS fund could invest in such a financial index assuming that it met the other requirements for an acceptable financial index.