On 19 December 2023, the European Securities and Markets Authority (ESMA) published a final report on draft regulatory technical standards (RTS) under the revised European long-term investment fund (ELTIF) Regulation.

The final report takes into account comments received to an earlier ESMA consultation and in accordance with ESMA’s mandate under the revised ELTIF Regulation the draft RTS cover the:

  • Criteria for establishing the circumstances in which the use of financial derivative instruments solely serves hedging purpose.
  • Circumstances in which the life of an ELTIF is considered compatible with the life-cycles of each of the individual assets, as well as different features of the redemption policy of the ELTIF.
  • Circumstances for the use of the matching mechanism, i.e., the possibility of full or partial matching (before the end of the life of the ELTIF) of transfer requests of units or shares of the ELTIF by exiting ELTIF investors with transfer requests by potential investors.
  • Criteria to be used for certain elements of the itemised schedule for the orderly disposal of the ELTIF assets.
  • Costs disclosure.

The draft RTS have now been submitted to the European Commission for adoption. From the date of submission, the Commission shall take a decision on whether to adopt the RTS within three months. The Commission may extend that period by one month.