ESMA published updated guidance on 29 March 2019 in its UCITS Q&A on benchmark and past performance disclosures to be included in KIIDs. The updated guidance clarifies the disclosures relating to benchmarks and performance that should be included in the KIID and will necessitate a review of KIIDs (and fund documentation more broadly).
The guidance states that where a UCITS refers to any comparator – and not just an index or benchmark (a "Target"), this will trigger certain disclosure requirements in respect of the UCITS performance against the Target, even if the Target is not identified as a "benchmark" (e.g. where a UCITS aims to outperform 3-month EURIBOR). UCITS must also clearly indicate whether they are actively or passively managed ("passive" meaning index-tracking). In the case of a UCITS that is actively managed but states / implies reference to a Target for any aspect of management or performance measurement, the degree of freedom the manager exercises by reference to the Target must be disclosed.
Importantly, the guidance also stipulates that the disclosures in the KIID around performance measured against the Target must be consistent across all investor communications (including offering documents and marketing materials), across all channels of communication, and the same information must be provided to all investors. This new guidance should be implemented "as soon as practicable" or at the next KIID update.