European Commission Adopts Delegated Regulation Under ELTIF Regulation

The European Commission has adopted a Delegated Regulation supplementing the European Long-Term Investment Funds Regulation with regard to regulatory technical standards specifying when derivatives will be used solely for hedging the risks inherent to other investments of the ELTIF, the requirements for an ELTIF's redemption policy and liquidity management tools, the circumstances for the matching of transfer requests of units or shares of the ELTIF, certain criteria for the disposal of ELTIF assets, and certain elements of the costs disclosure.

Among other things, the adopted legislation sets out the:

• circumstances in which the use of financial derivative instruments for hedging purposes is considered as solely serving the purpose of hedging the risks inherent to the investments of the ELTIF;
• circumstances in which the life of an ELTIF is to be considered compatible with the life cycles of each of its individual assets;
• criteria to be used by the ELTIF managers to determine the minimum holding period referred to in Article 18(2), first subparagraph, point (a), of the ELTIF Regulation;
• minimum content requirements to the full or partial matching of transfer requests of units or shares of the ELTIF by existing and new investors where an ELTIF provides for that possibility under Article 19(2a) of the ELTIF Regulation; and
• criteria for the assessment of the market for potential buyers.

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