Q. Article 33(2)(c) of Regulation (EU) 2015/2365 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 ('SFTR') provides a transitional arrangement for collective investment undertakings subject to UCITS that are constituted before 12 January 2016. Should sub-funds established after 12 January 2016 avail of this transitional arrangement?
A. The Central Bank strongly recommends that any new sub-fund include in its prospectus documentation the SFTR required disclosure on the use of SFTs and total return swaps. SFTs and total return swaps are used at sub-fund level rather than umbrella level. Accordingly, the SFTR disclosures are required at sub-fund level. Further, the term 'collective investment undertaking' is used in the context of sub-funds throughout the SFTR. For example, recital 16 refers to a "collective investment undertaking's investment strategy" and recital 20 refers to "a collective investment undertaking's investment po
…