AI Summary of Article 84
This document outlines the operational parameters for UCITS regarding the repurchase and redemption of units. It stipulates that while UCITS must comply with unit-holder requests for repurchases and redemptions, they may temporarily suspend these actions in exceptional circumstances to safeguard unitholder interests.
Furthermore, any activation or deactivation of liquidity management tools requires immediate notification to the competent authorities, which must subsequently inform relevant regulatory bodies. ESMA is tasked with developing guidelines for supervisory interventions and harmonisation of practices, emphasising that liquidity management responsibility remains with UCITS.
Article 84
1. A UCITS shall repurchase or redeem its units at the request of any unit-holder.
2. By way of derogation from paragraph 1:
(a) a UCITS may, in the interest of its unitholders, temporarily suspend the subscription, repurchase and redemption of its units as referred to in Annex IIA, point 1, or activate or deactivate other liquidity management tools selected from points 2 to 8 of that Annex in accordance with Article 18a(2). The UCITS may also, in the interest of its unitholders, activate side pockets as referred to in Annex IIA, point 9;
(b) in the interest of investors, in exceptional circumstances and after consulting the UCITS, the competent authorities of the UCITS home Member State may require a UCITS to activate or deactivate the liquidity management tool referred to in Annex IIA, point 1, where there are risks to investor protection or financial stability that, on a reasonable and balanced view, necessitate such activation or deactivation.
A UCITS shall only use a suspension of subscriptions, repurchases and redemptions or side pockets as referred to in the first subparagraph, point (a), in exceptional cases where circumstances so require and where justified having regard to the interests of its unitholders.