UCITS and certain types of AIFs: clarifications on performance fees

On 28 May 2021 and 16 July 2021, new questions on performance fees were added to the ESMA Q&As on UCITS and on AIFMs, to complete the Guidelines on performance fees in UCITS and certain types of AIFs ("Guidelines") which ESMA had published on 5 December 2020 and in respect of which the CSSF confirmed, by way of its Circular 20/764,  the integration of those Guidelines into its administrative and regulatory practices.

The clarifications provided by ESMA through its Q&A in May and July 2021 notably concern:

• the set-up of the reference period for performance fee models based on a benchmark index;
• the set-up of the reference period in case of a merger where the receiving UCITS/AIF is a newly established fund with no performance history and is in effect a continuation of the merging UCITS/AIF;
• the application of the Guidelines in the case of delegation of the portfolio management function to different delegated portfolio managers within the same sub-fund of a UCITS; and
• the crystallisation of performance fees in case of creation of a new sub-fund/share class in an existing umbrella UCITS or AIF in the course of its financial year or in case of creation of a new UCITS/AIF.