The UCITS Directive allows for different share classes to be offered to investors, but does not prescribe whether, and to what extent, share classes of a given undertaking for collective investment in transferable securities (UCITS) can differ from each other. As a result, ESMA has identified diverging national practices as to the types of share class that are permitted, ranging from very simple share classes to much more sophisticated ones.

ESMA has now published a discussion paper on share classes of UCITS as it sees merit in developing a common understanding of what constitutes a share class of UCITS and of the ways in which share classes may differ from each other.

The discussion paper sets out ESMA’s views on what constitutes a share class, including how to distinguish share classes from compartments of UCITS. Additionally, the discussion paper provide possible approaches to the extent of differentiation between share classes that should be permitted.

The deadline for responses to the discussion paper is 27 March 2015.

View Discussion Paper: Share classes of UCITS, 23 December 2014