Commission Directive 2010/43/EU

In force

This text since 1 Aug 2022law://eu/dir/2010/43/art_41@2026-11-12

Contents

Article 41Calculation of global exposure#

1.Member States shall require management companies to calculate the global exposure of a managed UCITS as referred to in Article 51(3) of Directive 2009/65/EC as either of the following:

(a)the incremental exposure and leverage generated by the managed UCITS through the use of financial derivative instruments including embedded derivatives pursuant to the fourth subparagraph of Article 51(3) of Directive 2009/65/EC, which may not exceed the total of the UCITS net asset value;

(b)the market risk of the UCITS portfolio.

2.Member States shall require management companies to calculate the UCITS global exposure on at least a daily basis.

3.Member States may allow management companies to calculate global exposure by using the commitment approach, the value at risk approach or other advanced risk measurement methodologies as may be appropriate. For the purposes of this provision, ‘value at risk’ shall mean a measure of the maximum expected loss at a given confidence level over a specific time period.Member States shall require management companies to ensure that the method selected to measure global exposure is appropriate, taking into account the investment strategy pursued by the UCITS and the types and complexities of the financial derivative instruments used, and the proportion of the UCITS portfolio which comprises financial derivative instruments.

4.Where a UCITS in accordance with Article 51(2) of Directive 2009/65/EC employs techniques and instruments including repurchase agreements or securities lending transactions in order to generate additional leverage or exposure to market risk, Member States shall require management companies to take these transactions into consideration when calculating global exposure.

Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.

Key facts

Type: Directive · Commission Directive 2010/43/EU · EEA relevant
Adopted: 1 Jul 2010
In force: 30 Jul 2010
Text current to: 1 Aug 2022
Made by: European Commission
Official: EUR-Lex 32010L0043 · ELI

Topics

approval approximation of laws business management financial legislation financial management investment company market access merger right of establishment securities Freedom of establishment Free movement of capital

History · 1 version

1 Aug 2022Reading

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Cited by 4: this act2 provisions; Commission Delegated Directive (EU) 2021/1270 (UCITS)4 provisions; Commission Directive 2010/42/EU; Commission Regulation (EU) No 583/20102 provisions

Defined terms · 13

Show every defined term

board of directors
means the board of directors of the management company;
client
means any natural or legal person, or any other undertaking including a UCITS, to whom a management company provides a service of collective portfolio management or services pursuant to Article 6(3) of Directive 2009/65/EC;
counterparty risk
means the risk of loss for the UCITS resulting from the fact that the counterparty to a transaction may default on its obligations prior to the final settlement of the transaction’s cash flow;
execution venue
shall mean a regulated market as referred to under Article 4(1)(14) of Directive 2004/39/EC, a multilateral trading facility as referred to in Article 4(1)(15) of that Directive, a systematic internaliser as referred to in Article 4(1)(7) of that Directive, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.
liquidity risk
means the risk that a position in the UCITS portfolio cannot be sold, liquidated or closed at limited cost in an adequately short time frame and that the ability of the UCITS to comply at any time with Article 84(1) of Directive 2009/65/EC is thereby compromised;
market risk
means the risk of loss for the UCITS resulting from fluctuation in the market value of positions in the UCITS’ portfolio attributable to changes in market variables, such as interest rates, foreign exchange rates, equity and commodity prices or an issuer’s credit worthiness;
operational risk
means the risk of loss for the UCITS resulting from inadequate internal processes and failures in relation to people and systems of the management company or from external events, and includes legal and documentation risk and risk resulting from the trading, settlement and valuation procedures operated on behalf of the UCITS;
senior management
means the person or persons who effectively conduct the business of a management company in accordance with Article 7(1)(b) of Directive 2009/65/EC;
supervisory function
means the relevant persons or body or bodies responsible for the supervision of its senior management and for the assessment and periodical review of the adequacy and effectiveness of the risk management process and of the policies, arrangements and procedures put in place to comply with the obligations under Directive 2009/65/EC;
sustainability factors
means sustainability factors as defined in Article 2, point (24), of Regulation (EU) 2019/2088.
sustainability risk
means sustainability risk as defined in Article 2, point (22), of Regulation (EU) 2019/2088 of the European Parliament and of the Council;
unit-holder
means any natural or legal person holding one or more units in a UCITS;
value at risk
shall mean a measure of the maximum expected loss at a given confidence level over a specific time period.

Defined terms · 13

Show every defined term

board of directors
means the board of directors of the management company;
client
means any natural or legal person, or any other undertaking including a UCITS, to whom a management company provides a service of collective portfolio management or services pursuant to Article 6(3) of Directive 2009/65/EC;
counterparty risk
means the risk of loss for the UCITS resulting from the fact that the counterparty to a transaction may default on its obligations prior to the final settlement of the transaction’s cash flow;
execution venue
shall mean a regulated market as referred to under Article 4(1)(14) of Directive 2004/39/EC, a multilateral trading facility as referred to in Article 4(1)(15) of that Directive, a systematic internaliser as referred to in Article 4(1)(7) of that Directive, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.
liquidity risk
means the risk that a position in the UCITS portfolio cannot be sold, liquidated or closed at limited cost in an adequately short time frame and that the ability of the UCITS to comply at any time with Article 84(1) of Directive 2009/65/EC is thereby compromised;
market risk
means the risk of loss for the UCITS resulting from fluctuation in the market value of positions in the UCITS’ portfolio attributable to changes in market variables, such as interest rates, foreign exchange rates, equity and commodity prices or an issuer’s credit worthiness;
operational risk
means the risk of loss for the UCITS resulting from inadequate internal processes and failures in relation to people and systems of the management company or from external events, and includes legal and documentation risk and risk resulting from the trading, settlement and valuation procedures operated on behalf of the UCITS;
senior management
means the person or persons who effectively conduct the business of a management company in accordance with Article 7(1)(b) of Directive 2009/65/EC;
supervisory function
means the relevant persons or body or bodies responsible for the supervision of its senior management and for the assessment and periodical review of the adequacy and effectiveness of the risk management process and of the policies, arrangements and procedures put in place to comply with the obligations under Directive 2009/65/EC;
sustainability factors
means sustainability factors as defined in Article 2, point (24), of Regulation (EU) 2019/2088.
sustainability risk
means sustainability risk as defined in Article 2, point (22), of Regulation (EU) 2019/2088 of the European Parliament and of the Council;
unit-holder
means any natural or legal person holding one or more units in a UCITS;
value at risk
shall mean a measure of the maximum expected loss at a given confidence level over a specific time period.