UCITS/AIFs’ Share Classes and Hedging

Pursuant to the ESMA Opinion n° 34-43-296 relating to share classes of UCITS, the AMF updated its regulations and doctrine with respect to the hedging possible when a fund (or a compartment) issues classes of shares:

• UCITS: in accordance with the ESMA opinion, UCITS funds may hedge currency risk a the level of a single share class.
• Retail AIFs: in addition to the currency risk, a single share class may hedge another risk factor (examples are provided in the amended doctrine mentioned below).
• Professional AIFs: they can now adopt more flexible management strategies for share classes, including hedging or exposure strategies.

In order to apply such rules, the AMF provides that the following principles should be followed:

• Non-Contagion Principle.
• Transparency Principle.

In light of the above, the AMF Position-Reccomandation 2011-05 has been amended by the AMF.

MiFID II Update

The AMF published several updates to its doctrine taking into account the changes brought by MiFID II, including several Instructions and Positions relating to the partition of portfolio management companies and investment firms. The AMF will continue this work of updating its doctrine over the coming months.

Read the updated doctrine on the AMF website (in French).

AFG Publications

The AFG has issued several publications of interest, including:

• A guide on risk management and valuation of contingent convertibles (CoCos).
• Charters: ETF Code of Conduct Charter and ETF Continuity Plan.
• Response to the European Commission’s consultation on cross-border distribution of funds.

The publications are available on the AFG website (in French).