ESMA has published its final guidelines on repurchase and reverse repurchase agreements for UCITS funds. You may recall that when ESMA published it’s guidance for UCITS in the summer it consulted on the use of repos by UCITS with a view to issuing further guidance. The latest guidelines state that UCITS should only enter into such agreements if they are able to recall at any time any assets or the full amount of cash. ESMA considers fixed-term repurchase and reverse repurchase agreements that do not exceed seven days as arrangements that allow the assets to be recalled at any time.
The guidelines will now be translated into all EU languages and will be incorporated into ESMA’s guidelines on ETFs and other UCITS issues, which were published in July 2012. The full set of guidelines will enter into force two months after the publication of the translations