UCITS and AIFs: CSA on valuation

On 20 January 2022, ESMA launched a Common Supervisory Action ("CSA") with national competent authorities ("NCAs") on valuation of UCITS and open-ended AIFs (“CSA on valuation”) across the EU.

The CSA aims to assess compliance of supervised entities with the relevant valuation-related provisions in the UCITS and AIFMD frameworks, in particular the valuation of less liquid assets (e.g. unlisted equities, unrated bonds, corporate debt, real estate, high yield bonds, emerging markets, listed equities that are not actively traded, bank loans) and will be conducted throughout 2022.

The various actions and assessments carried out in the framework of the CSA on valuation are intended to lead to greater convergence in the approach of NCAs to the supervision of valuation-related issues.

In this context, in a Communiqué dated 24 January 2022, the CSSF indicated that at the beginning of March 2022 it will launch the first phase of the CSA by asking a representative selection of Luxembourg-based authorised investment fund managers (“IFMs”) of UCITS and open-ended AIFs and a limited number of EU IFMs managing Luxembourg UCITS and AIFs to complete a dedicated questionnaire for all UCITS and AIFs managed.

The response questionnaire will have to be submitted by the selected IFMs through a dedicated communication channel set up by the CSSF. The CSSF will inform the industry once this communication channel, together with additional guidance, will be available for use.