Exchange Traded Funds and other OGAW-Funds

GDV’s position on the ESMA consultation

The German insurance industry welcomes the opportunity to contribute its views to ESMA’s consultation paper regarding the guidelines planned on Exchange Traded Funds (ETFs) and other Undertakings for Collective Investments in Transferable Securities (UCITS) issues. As regards the collateralisation of efficient portfolio management techniques, insurance companies might be affected by ESMAs future guidelines not only as investors of UCITS but also as investors of the German institutional investors’ fund (“Spezialfonds”).

Against this background, we would like to highlight the following points:

  • Insurers may face further restrictions regarding authorized collaterals for securities or commodity borrowing and repos due to the application of the CESR guidelines on Risk Management and Calculation of Global Exposure and Counterparty Risks for UCITS.
  • Individual definitions of haircuts should remain possible for insurers.
  • A high correlation of collateral and composition of the underlying portfolio does not automatically generate an additional value in terms of security.
  • With regards to eligibility of assets to be used as collateral, an indicative list does not seem necessary.

The GDV’s complete position paper is available in the download section.


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on ESMA Consultation paper as of 30 January 2012 regarding ESMA’s guidelines on ETFs and other UCITS issues