On 20 January 2022, the European Securities and Markets Authority (ESMA) announced that it was launching a Common Supervisory Action (CSA) with Member State competent authorities on the valuation of UCITS and open-ended Alternative Investment Funds (AIFs) across the EU. Throughout 2022 the CSA will focus on authorised managers of UCITS and open-ended AIFs investing in less liquid assets, i.e. unlisted equities, unrated bonds, corporate debt, real estate, high yield bonds, emerging markets, listed equities that are not actively traded, bank loans.
Throughout 2022, Member State competent authorities will share knowledge and experiences through ESMA to foster convergence in how they supervise valuation-related issues. One core objective is the consistent and effective supervision of valuation methodologies, policies and procedures of supervised entities to ensure that less liquid assets are valued fairly both during normal and stressed market conditions, in line with applicable rules.
This is the third CSA that ESMA and Member State competent authorities have launched on asset management. The first two covered UCITS liquidity risk management and supervision of costs and fees in UCITS.