The UCITS Directive recognises the possibility for UCITS to offer different share classes to investors but it does not prescribe whether, and to what extent, share classes of a given UCITS can differ from one another. The European Securities and Markets Authority (ESMA) has identified diverging national practices in Europe regarding the types of share class that are permitted and therefore proposes establishing a common regulatory framework for share classes in the EU.

ESMA has now published a discussion paper on share classes of UCITS which describes their nature, the reasons for their existence and their key elements. The discussion paper builds on the feedback received to an earlier ESMA discussion paper, published in December 2014, which proposed providing actual examples of share classes deemed compatible and non-compatible with the UCITS framework. In this latest discussion paper, ESMA puts forward a revised, principles-based approach.

The deadline for responses to the discussion paper is 6 June 2016.

View ESMA discussion paper on UCITS share classes, 6 April 2016