ESMA revises UCITS collateral rules

By Hazel Sheffield
24 Mar 2014

The European Securities and Markets Authority has revised its guidelines on how UCITS should manage collateral received from over-the-counter derivatives and efficient portfolio management techniques, such as repurchasing, that entered into force on Feb. 18, 2013.

Under the new guidelines, UCITS may now use different transferable securities and money market instruments guaranteed by a member state, local authorities, a third country or a public international body as collateral without applying any issuer diversification. However any collateral without such a guarantee is limited to 20% ...

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