While the ESMA guidelines on performance fees are a useful exercise to enhance European convergence, they are overly restrictive in setting a five-year reference period

  • On 20 March 2020, the European Securities and Markets Authority (ESMA) issued its Guidelines on performance fees in UCITS and certain types of AIFs.
  • The French Asset Management Association (AFG) and its members have always given full support to all efforts to enhance supervisory convergence in Europe.
  • However, the ESMA guidelines go too far by imposing one model based on a reference period of at least five years, without any real prior assessment of the impact at European level.
  • The AFG exceptionally calls for the partial application of these guidelines, i.e. compliance with most of its provisions, but asks that the application of a reference period of at least five years be optional rather than mandatory.

15 April 2020 Press Release