On 26 June 2025, ESMA published its Final Report on the technical advice requested by the European Commission as part of the review of Directive 2007/16/EC (commonly referred to as the UCITS Eligible Assets Directive or UCITS EAD).
This report represents a key milestone in the evolution of the regulatory framework governing UCITS funds. It outlines a set of proposals aimed at:
- Clarifying divergences in implementation across EU Member States,
- Reassessing the definition of liquid assets,
- Providing a framework for indirect exposures to alternative assets (including crypto-assets, catastrophe bonds, etc.),
- Aligning specific elements of the UCITS regime with MiFID II, MiCA, and the DLT Pilot Regime.
Two significant points worth highlighting:
- Derivatives: ESMA confirms the application of a look-through approach to limit economic exposure to ineligible assets via derivatives (beyond the 10% limit).
- Investments in AIFs: ESMA draws a clear distinction between open-ended and closed-ended AIFs. Investments in any AIF—regardless of structure—are subject to a look-through requirement (again, excluding the 10% derogation).
CerLab Finance supports asset managers and institutional investors in preparing for these regulatory developments, through tailored regulatory due diligence, internal framework reviews, and strategic sectoral monitoring.