Amendments to Directive 2009/65/EC
Article 2
Directive 2009/65/EC is amended as follows: (1) in Article 2(1), the following point is added: ‘(u) “central securities depository” means a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014 of the European Parliament and of the Council ( *16 ) . ( *16 ) Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 ( OJ L 257, 28.8.2014, p. 1 ).’;" (2) Article 6 is amended as follows: (a) paragraph 3 is amended as follows: (i) in the first subparagraph, point (b), the following points are added: ‘(iii) reception and transmission of orders in relation to financial instruments; (iv) any other function or activity which is already provided by the management company in relation to a UCITS that it manages in accordance with this Article, or in relation to services that it provides in accordance with this paragraph, provided that any potential conflict of interest created by the provision of that function or activity to other parties is appropriately managed.’; (ii) in the first subparagraph, the following point is added: ‘(c) administration of benchmarks in accordance with Regulation (EU) 2016/1011;’; (iii) the second subparagraph is replaced by the following: ‘Management companies shall not be authorised under this Directive to provide only the services referred to in this paragraph. Management companies shall not be authorised to provide the services referred to in the first subparagraph, point (c), which are used in the UCITS that they manage.’; (b) paragraph 4 is replaced by the following: ‘4. Article 15, Article 16 except for paragraph 5, first subparagraph, and Articles 23, 24 and 25 of Directive 2014/65/EU shall apply where the services referred to in paragraph 3, points (a) and (b), of this Article are provided by management companies.’ ; (3) Article 7 is amended as follows: (a) in paragraph 1, the first subparagraph is amended as follows: (i) points (b) and (c) are replaced by the following: ‘(b) the persons who effectively conduct the business of the management company are of sufficiently good repute and are sufficiently experienced also in relation to the type of UCITS managed by the management company, the names of those persons and of every person succeeding them in office are communicated forthwith to the competent authorities and the conduct of the business of a management company is decided by at least two natural persons meeting such conditions who either are employed full-time by that management company or are executive members or members of the management body of the management company committed full-time to conducting the business of that management company, and who are domiciled in the Union; (c) the application for authorisation is accompanied by a programme of activity setting out, at least, the organisational structure of the management company, and specifying the human and technical resources that will be used to conduct the business of the management company and information about the persons effectively conducting the business of that management company, including: (i) a description of the role, title and level of seniority of those persons; (ii) a description of the reporting lines and responsibilities of those persons within and outside the management company; (iii) an overview of the amount of time that each of those persons allocates to each responsibility; (iv) information on how the management company intends to comply with its obligations under this Directive, and with its obligations under Article 3(1), Article 6(1), point (a), and Article 13(1) of Regulation (EU) 2019/2088 of the European Parliament and of the Council ( *17 ) , and a detailed description of the appropriate human and technical resources to be used by the management company to that effect. ( *17 ) Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector ( OJ L 317, 9.12.2019, p. 1 ).’;" (ii) the following point is added: ‘(e) information is provided by the management company on arrangements made for the delegation and sub-delegation to third parties of functions in accordance with Article 13, comprising at least the following: (i) the legal name and relevant identifier of the management company; (ii) for each delegate: — its legal name and relevant identifier, — its jurisdiction of establishment, and — where relevant, its supervisory authority; (iii) a detailed description of the human and technical resources employed by the management company for: — performing day-to-day portfolio management or risk management tasks within the management company, and — monitoring the delegated activity; (iv) in respect of each of the UCITS it manages or intends to manage: — a brief description of the delegated portfolio management function, including whether such delegation amounts to a partial or full delegation, and — a brief description of the delegated risk management function, including whether such delegation amounts to a partial or full delegation; (v) a description of the periodic due diligence measures to be carried out by the management company to monitor the delegated activity.’; (b) the following paragraph is added: ‘7. Member States shall require that management companies, before implementation, notify the competent authorities of their home Member State of any material changes to the conditions for initial authorisation, in particular material changes to the information provided in accordance with this Article.’ ; (4) Article 13 is amended as follows: (a) paragraph 1 is amended as follows: (i) the introductory wording is replaced by the following: ‘Management companies which intend to delegate to third parties the task of carrying out, on their behalf, one or more of the functions referred to in Annex II or of the services referred to in Article 6(3), shall notify the competent authorities of their home Member State before the delegation arrangements become effective. The following conditions shall be met:’; (ii) point (b) is replaced by the following: ‘(b) the mandate must not prevent the effectiveness of supervision of the management company, and, in particular, must not prevent the management company from acting, or the UCITS from being managed, in the best interests of its investors and clients;’; (iii) points (g), (h) and (i) are replaced by the following: ‘(g) the mandate must not prevent the persons who conduct the business of the management company from giving further instructions to the undertaking to which functions or provision of services are delegated at any time or from withdrawing the mandate with immediate effect where to do so is in the interest of investors and clients; (h) having regard to the nature of the functions and provision of services to be delegated, the undertaking to which functions or provision of services are to be delegated must be qualified and capable of undertaking the functions or performing the services in question; (i) the UCITS’ prospectuses must list the services and functions which the management company has been allowed to delegate in accordance with this Article; and (j) the management company must be able to justify its entire delegation structure on objective reasons.’; (b) paragraph 2 is replaced by the following: ‘2. The liability of the management company or the depositary shall not be affected by the fact that the management company has delegated functions or services to a third party. The management company shall not delegate the functions or services to the extent that, in essence, it can no longer be considered to be the manager of the UCITS or the provider of the services referred to in Article 6(3) and to the extent that it becomes a letter-box entity. 3. By way of derogation from paragraphs 1 and 2 of this Article, where the marketing function referred to in Annex II, third indent, is performed by one or several distributors which are acting on their own behalf and which market the UCITS under Directive 2014/65/EU or through insurance-based investment products in accordance with Directive (EU) 2016/97 of the European Parliament and of the Council ( *18 ) , such function shall not be considered to be a delegation subject to the requirements of paragraphs 1 and 2 of this Article irrespective of any distribution agreement between the management company and the distributor. 4. The management company shall ensure that the performance of the functions referred to in Annex II and the provision of the services referred to in Article 6(3) comply with this Directive. That obligation shall apply irrespective of the regulatory status or location of any delegate or sub-delegate. 5. The Commission shall adopt, by means of delegated acts in accordance with Article 112a, measures specifying: (a) the conditions for fulfilling the requirements set out in paragraph 1; (b) the conditions under which the management company is to be deemed to have delegated its functions to the extent that it becomes a letter-box entity and can no longer be considered to be the manager of the UCITS or the provider of the services referred to in Article 6(3), as set out in paragraph 2. 6. By 16 April 2029, ESMA shall provide the European Parliament, the Council and the Commission with a report analysing market practices regarding delegation and compliance with Article 7 and with paragraphs 1 to 5 of this Article, based, inter alia, on the data reported to the competent authorities in accordance with Article 20a(2), point (d), and on the exercise of ESMA’s supervisory convergence powers. That report shall also analyse compliance with the substance requirements of this Directive. ( *18 ) Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution ( OJ L 26, 2.2.2016, p. 19 ).’;" (5) Article 14 is amended as follows: (a) the following paragraph is inserted: ‘2a. Where a management company manages or intends to manage a UCITS at the initiative of a third party, including cases where that UCITS uses the name of a third-party initiator or where a management company appoints a third-party initiator as a delegate pursuant to Article 13, the management company shall, taking account of any conflicts of interest, submit detailed explanations and evidence of its compliance with paragraph 1, point (d), of this Article to the competent authorities of its home Member State. In particular, the management company shall specify the reasonable steps it has taken to prevent conflicts of interest arising from the relationship with the third party or, where those conflicts of interest cannot be prevented, how it identifies, manages, monitors and, where applicable, discloses, those conflicts of interest in order to prevent them from adversely affecting the interests of the UCITS and its investors.’ ; (b) the following paragraph is added: ‘4. For the purposes of paragraph 1, point (a), ESMA shall by 16 October 2025 submit a report to the European Parliament, the Council and the Commission assessing the costs charged by UCITS and management companies to the investors and explaining the reasons for the level of those costs and for any differences between them, including differences resulting from the nature of the UCITS concerned. As part of that assessment, ESMA shall analyse, within the framework of Article 29 of Regulation (EU) No 1095/2010, the appropriateness and effectiveness of the criteria set out in the ESMA convergence tools on the supervision of costs. For the purposes of that report, and in accordance with Article 35 of Regulation (EU) No 1095/2010, the competent authorities shall provide ESMA on a one-time basis with data on costs including all fees, charges and expenses which are directly or indirectly borne by the investors, or by the management company in connection with the operations of the UCITS, and that are to be directly or indirectly allocated to the UCITS. The competent authorities shall make those data available to ESMA within their powers, which include the power to require management companies to provide information as laid down in Article 98(2) of this Directive.’ ; (6) the following article is inserted: ‘Article 18a 1. Member States shall ensure that at least the liquidity management tools set out in Annex IIA are available to UCITS. 2. A UCITS shall select at least two appropriate liquidity management tools from those referred to in Annex IIA, points 2 to 8, after assessing the suitability of those tools in relation to its pursued investment strategy, its liquidity profile and its redemption policy. The UCITS shall include those tools in its fund rules or the instruments of incorporation for possible use in the interest of the UCITS’ investors. It shall not be possible for that selection to include only the tools referred to in Annex IIA, points 5 and 6. By way of derogation from the first subparagraph, a UCITS may decide to select only one liquidity management tool from those referred to in Annex IIA, points 2 to 8, if that UCITS is authorised as a money market fund in accordance with Regulation (EU) 2017/1131 of the European Parliament and of the Council ( *19 ) . The UCITS shall implement detailed policies and procedures for the activation and deactivation of any selected liquidity management tool and the operational and administrative arrangements for the use of such tool. The selection referred to in the first and second subparagraphs and the detailed policies and procedures for the activation and deactivation shall be communicated to the competent authorities of the UCITS home Member State. Redemption in kind as referred to in Annex IIA, point 8, shall only be activated to meet redemptions requested by professional investors and if the redemption in kind corresponds to a pro rata share of the assets held by the UCITS. By way of derogation from the fourth subparagraph of this paragraph, the redemption in kind need not correspond to a pro rata share of the assets held by the UCITS if that UCITS is solely marketed to professional investors, or if the aim of that UCITS’ investment policy is to replicate the composition of a certain stock or debt securities index and that UCITS is an exchange-traded fund as defined in Article 4(1), point (46), of Directive 2014/65/EU. 3. ESMA shall develop draft regulatory technical standards to specify the characteristics of the liquidity management tools set out in Annex IIA. When developing those draft regulatory technical standards, ESMA shall take account of the diversity of investment strategies and underlying assets of UCITS. Those standards shall not restrict the ability of UCITS to use any appropriate liquidity management tool for all asset classes, jurisdictions and market conditions. 4. By 16 April 2025, ESMA shall develop guidelines on the selection and calibration of liquidity management tools by UCITS for liquidity risk management and for mitigating financial stability risks. Those guidelines shall recognise that the primary responsibility for liquidity risk management remains with UCITS. They shall include indications as to the circumstances in which side pockets, as referred to in Annex IIA, point 9, can be activated. They shall allow adequate time for adaptation before they apply, in particular for existing UCITS. 5. ESMA shall submit the draft regulatory technical standards referred to in paragraph 3 of this Article to the Commission by 16 April 2025. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in paragraph 3 in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. ( *19 ) Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds ( OJ L 169, 30.6.2017, p. 8 ).’;" (7) the following articles are inserted: ‘Article 20a 1. A management company shall regularly report to the competent authorities of the UCITS home Member State on the markets and instruments in which it trades on behalf of UCITS it manages. The management company shall, in respect of each UCITS it manages, provide information on the instruments in which it is trading, on markets of which it is a member or where it actively trades, and on the exposures and assets of the UCITS. That information shall include the identifiers that are necessary to connect the data provided on assets, UCITS and management companies to other supervisory or publicly available data sources. 2. A management company shall, for each of the UCITS it manages, provide the following to the competent authorities of the UCITS home Member State: (a) the arrangements for managing the liquidity of the UCITS, including the current selection of liquidity management tools, and any activation or deactivation thereof; (b) the current risk profile of the UCITS, including the market risk, liquidity risk, counterparty risk, other risks including operational risk, and the total amount of leverage employed by the UCITS; (c) the results of the stress tests performed in accordance with Article 51(1); (d) information regarding delegation arrangements concerning portfolio management or risk management functions as follows: (i) information on the delegates, specifying their name and domicile or registered office or branch, whether they have any close links with the management company, whether they are authorised or regulated entities for the purposes of asset management, their supervisory authority, where relevant, and including the identifiers of the delegates that are necessary to connect the information provided to other supervisory or publicly available data sources; (ii) the number of full-time equivalent human resources employed by the management company for performing day-to-day portfolio management or risk management tasks within that management company; (iii) a list and description of the activities concerning portfolio management and risk management functions which are delegated; (iv) where the portfolio management function is delegated, the amount and percentage of the UCITS’ assets which are subject to delegation arrangements concerning the portfolio management function; (v) the number of full-time equivalent human resources employed by the management company to monitor the delegation arrangements; (vi) the number and dates of the periodic due diligence reviews carried out by the management company to monitor the delegated activity, a list of issues identified and, where relevant, of the measures adopted to address those issues and the date by which those measures are to be implemented; (vii) where sub-delegation arrangements are in place, the information required under points (i), (iii) and (iv) in respect of the sub-delegates and the activities related to the portfolio management and risk management functions that are sub-delegated; (viii) the commencement and expiry dates of the delegation and sub-delegation arrangements; (e) the list of Member States in which the units of the UCITS are actually marketed by its management company or by a distributor which is acting on behalf of that management company. 3. The competent authorities of the UCITS home Member State shall ensure that all information gathered under this Article in respect of all UCITS that they supervise and the information gathered under Article 7 is made available to other relevant competent authorities, ESMA, EBA, the European Supervisory Authority (European Insurance and Occupational Pensions Authority) established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council ( *20 ) (known collectively as “European Supervisory Authorities” or “ESAs”) and the European Systemic Risk Board (ESRB), whenever necessary for the purpose of carrying out their duties, by means of the procedures set out in Article 101. The competent authorities of the UCITS home Member State shall ensure that all information gathered under this Article in respect of all UCITS that they supervise is made available, for statistical purposes only, to the ESCB, by means of the procedures set out in Article 101. The competent authorities of the UCITS home Member State shall, without delay, provide information by means of the procedures set out in Article 101, and bilaterally to the competent authorities of other Member States directly concerned, if a management company under their responsibility, or a UCITS managed by that management company, could potentially constitute an important source of counterparty risk to a credit institution or other systemically relevant institutions in other Member States, or to the stability of the financial system in another Member State. 4. Where necessary for the effective monitoring of systemic risk, the competent authorities of the UCITS home Member State may require information in addition to that described in paragraph 1, on a periodic or ad hoc basis. The competent authorities shall inform ESMA of any such additional reporting requirements. In exceptional circumstances, and where required in order to ensure the stability and integrity of the financial system or to promote long-term sustainable growth, ESMA after consulting the ESRB may request the competent authorities of the UCITS home Member State to impose additional reporting requirements. 5. ESMA shall develop draft regulatory technical standards specifying: (a) the details of the information to be reported in accordance with paragraph 1, paragraph 2, points (a), (b), (c) and (e), and paragraph 4; (b) the appropriate level of standardisation of the information to be reported in accordance with paragraph 2, point (d); (c) the reporting frequency and timing. When developing the draft regulatory technical standards referred to in the first subparagraph, point (b), ESMA shall not introduce reporting obligations in addition to those set out in paragraph 2, point (d). When developing the draft regulatory technical standards referred to in the first subparagraph, points (a) and (b), ESMA shall take into consideration other reporting requirements to which the management companies are subject, international developments and standards, and the findings of the report issued in accordance with Article 20b. ESMA shall submit those draft regulatory technical standards to the Commission by 16 April 2027. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 6. ESMA shall develop draft implementing technical standards specifying: (a) the format and data standards for the reports referred to in paragraphs 1, 2 and 4; (b) the identifiers that are necessary to connect the data on assets, UCITS and management companies in the reports referred to in paragraphs 1, 2 and 4 to other supervisory or publicly available data sources; (c) the methods and arrangements for submitting the reports referred to in paragraphs 1 and 2 of this Article, including methods and arrangements to improve data standardisation and efficient sharing and use of data already reported in any Union reporting framework by any relevant competent authority, at Union or national level, taking into account the findings of the report issued in accordance with Article 20b; (d) the template, including the minimum additional reporting requirements, to be used by management companies in exceptional circumstances as referred to in paragraph 4. ESMA shall submit those draft implementing technical standards to the Commission by 16 April 2027. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010. Article 20b 1. By 16 April 2026, ESMA shall submit to the Commission a report regarding the development of the integrated collection of supervisory data, which shall focus on how to: (a) reduce areas of duplication and inconsistencies between the reporting frameworks in the asset-management sector and other sectors of the financial industry; and (b) improve data standardisation and efficient sharing and use of data already reported within any Union reporting framework by any relevant competent authority, at Union or national level. In that report, ESMA shall also make a comparison of best practices for data collection in the Union and in other markets for retail investment funds. 2. When preparing the report referred to in paragraph 1, ESMA shall work in close cooperation with the European Central Bank, the other ESAs, and the competent authorities. ( *20 ) Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC ( OJ L 331, 15.12.2010, p. 48 ).’;" (8) Article 22a is amended as follows: (a) in paragraph 2, point (c) is replaced by the following: ‘(c) the depositary has exercised all due skill, care and diligence in the selection and appointment of any third party to whom it intends to delegate parts of its tasks, except where that third party is a central securities depository acting in the capacity of an investor CSD as defined in the delegated act adopted pursuant to Articles 29(3) and 48(10) of Regulation (EU) No 909/2014 and continues to exercise all due skill, care and diligence in the periodic review and ongoing monitoring of any third party to which it has delegated parts of its tasks and of the arrangements of the third party in respect of the matters delegated to it.’; (b) paragraph 4 is replaced by the following: ‘4. For the purposes of this Article, the provision of services by a central securities depository acting in the capacity of an issuer CSD as defined in the delegated act adopted pursuant to Articles 29(3) and 48(10) of Regulation (EU) No 909/2014 shall not be considered a delegation of the depositary’s custody functions. For the purposes of this Article, the provision of services by a central securities depository acting in the capacity of an investor CSD as defined in that delegated act shall be considered a delegation of the depositary’s custody functions.’ ; (9) in Article 29(1), second subparagraph, point (b) is replaced by the following: ‘(b) the directors of the investment company must be of sufficiently good repute and be sufficiently experienced also in relation to the type of business pursued by the investment company and, to that end: the names of the directors and of every person succeeding them in office must be communicated forthwith to the competent authorities; the conduct of an investment company’s business must be decided by at least two natural persons meeting such conditions who either are employed full-time by that investment company or are executive members or members of the management body of the investment company committed full-time to conducting the business of that investment company, and who are domiciled in the Union; and “directors” shall mean those persons who, under the law or the instruments of incorporation, represent the investment company, or who effectively determine the policy of the company.’; (10) in Article 57, the following paragraph is added: ‘3. Where a UCITS activates side pockets as referred to in Article 84(2), point (a), by means of asset segregation, the segregated assets may be excluded from the calculation of limits laid down in this Chapter.’ ; (11) in Article 69, the following paragraph is added: ‘6. In order to ensure the uniform application of the rules relating to the name of the UCITS, ESMA shall by 16 April 2026 develop guidelines to specify the circumstances in which the name of a UCITS is unfair, unclear or misleading. Those guidelines shall take into account relevant sectoral legislation. Sectoral legislation setting standards for fund names or marketing of funds takes precedence over those guidelines.’ ; (12) in Article 79, paragraph 1 is replaced by the following: ‘1. Key investor information, including the name of the UCITS, shall constitute pre-contractual information. It shall be fair, clear and not misleading. It shall be consistent with the relevant parts of the prospectus.’ ; (13) in Article 84, paragraphs 2 and 3 are replaced by the following: ‘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. 3. The UCITS shall, without delay, notify the competent authorities of its home Member State of the following: (a) where the UCITS activates or deactivates the liquidity management tool referred to in Annex IIA, point 1; (b) where the UCITS activates or deactivates any of the liquidity management tools referred to in Annex IIA, points 2 to 8, in a manner that is not in the ordinary course of business as envisaged in the fund rules or the instruments of incorporation of the UCITS. A UCITS shall, within a reasonable timeframe before it activates or deactivates the liquidity management tool referred to in Annex IIA, point 9, notify the competent authorities of its home Member State of such activation or deactivation. The competent authorities of the UCITS home Member State shall inform, without delay, the competent authorities of the management company’s home Member State, the competent authorities of the UCITS host Member State, ESMA and, if there are potential risks to the stability and integrity of the financial system, the ESRB, of any notification received in accordance with this paragraph. ESMA shall have the power to share the information received pursuant to this paragraph with the competent authorities. 3a. Where the competent authorities of the UCITS home Member State exercise powers pursuant to paragraph 2, point (b), they shall notify the competent authorities of the UCITS host Member State, the competent authorities of the management company’s home Member State, ESMA and, if there are potential risks to the stability and integrity of the financial system, the ESRB thereof. 3b. The competent authorities of the UCITS host Member State or the competent authorities of the management company’s home Member State may request the competent authorities of the UCITS home Member State to exercise powers pursuant to paragraph 2, point (b), specifying the reasons for the request and informing ESMA and, if there are potential risks to the stability and integrity of the financial system, the ESRB thereof. 3c. Where the competent authorities of the UCITS home Member State do not agree with the request referred to in paragraph 3b, they shall inform the requesting competent authorities, ESMA and, where the ESRB was informed of that request pursuant to paragraph 3b, the ESRB thereof, stating the reasons for the disagreement. 3d. On the basis of the information received pursuant to paragraphs 3b and 3c, ESMA shall issue without undue delay an opinion to the competent authorities of the UCITS home Member State on the exercise of powers pursuant to paragraph 2, point (b). ESMA shall communicate that opinion to the competent authorities of the UCITS host Member State. 3e. Where the competent authorities of the UCITS home Member State do not act in accordance with ESMA’s opinion referred to in paragraph 3d, or do not intend to comply with that opinion, they shall inform ESMA and the requesting competent authorities thereof, stating the reasons for their non-compliance or intention not to comply. In the event of a serious threat to investor protection, to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union, and unless such publication conflicts with the legitimate interests of the UCITS’ unitholders or of the public, ESMA may publish the fact that the competent authorities of the UCITS home Member State do not comply or do not intend to comply with its opinion, together with the reasons provided by those competent authorities for their non-compliance or intention not to comply. ESMA shall analyse whether the benefits of publication would outweigh the amplification of the threats to investor protection, to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union resulting from that publication and shall give the competent authorities advance notice of such publication. 3f. By 16 April 2026 ESMA shall develop guidelines providing indications to guide the competent authorities in their exercise of the powers set out in paragraph 2, point (b), and indications as to the situations that might lead to the requests referred to in paragraph 3b of this Article and Article 98(3) being put forward. When developing those guidelines, ESMA shall consider the potential implications of such supervisory intervention for investor protection and financial stability in another Member State or in the Union. Those guidelines shall recognise that the primary responsibility for liquidity risk management remains with UCITS.’ ; (14) in Article 98, the following paragraphs are added: ‘3. The competent authorities of the UCITS host Member State may, where they have reasonable grounds for doing so, request the competent authorities of the UCITS home Member State to exercise, without delay, powers pursuant to paragraph 2, other than point (j) of that paragraph, specifying the reasons for their request in as specific a manner as possible and informing ESMA and, if there are potential risks to the stability and integrity of the financial system, the ESRB thereof. The competent authorities of the UCITS home Member State shall, without undue delay, inform the competent authorities of the UCITS host Member State, ESMA and, if there are potential risks to the stability and integrity of the financial system, the ESRB, of the powers exercised and of their findings. 4. ESMA may request the competent authorities to submit, without undue delay, explanations to ESMA in relation to specific cases which raise a serious threat to investor protection, to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union.’ ; (15) Article 101 is amended as follows: (a) in paragraph 1, the first subparagraph is replaced by the following: ‘The competent authorities of the Member States shall cooperate with each other and with ESMA and the ESRB whenever necessary for the purpose of carrying out their duties under this Directive or of exercising their powers under this Directive or under national law.’; (b) in paragraph 9, the first subparagraph is replaced by the following: ‘In order to ensure uniform conditions of application of this Article and of Article 20a, ESMA may develop draft implementing technical standards to establish common procedures for competent authorities: (a) to cooperate in on-the-spot verifications and investigations as referred to in paragraphs 4 and 5; and (b) to determine the procedures for exchange of information between competent authorities, the ESAs, the ESRB, and members of the ESCB, subject to the applicable provisions of this Directive.’; (16) Article 102 is amended as follows: (a) in paragraph 1, the first subparagraph is replaced by the following: ‘Member States shall provide that all persons who work or who have worked for the competent authorities, as well as auditors and experts instructed by the competent authorities, be bound by the obligation of professional secrecy. That obligation means that no confidential information which those persons receive in the course of their duties shall be divulged to any person or authority whatsoever, save in summary or aggregate form such that UCITS, management companies and depositaries (undertakings contributing towards UCITS’ business activity) cannot be individually identified, without prejudice to cases covered by criminal or taxation law.’; (b) in paragraph 2, the following subparagraph is added: ‘Paragraph 1 and the first and second subparagraphs of this paragraph shall not preclude the exchange of information between competent authorities and tax authorities that are located in the same Member State. Where the information originates in another Member State, it shall only be disclosed in accordance with the first sentence of this subparagraph with the express consent of the competent authorities which have disclosed it.’; (17) the following article is inserted: ‘Article 110a By 16 April 2029, and following the report produced by ESMA in accordance with Article 13(6), the Commission shall initiate a review of the functioning of the rules laid down in this Directive and the experience acquired in applying them. That review shall include an assessment of the following aspects: (a) the effectiveness of the authorisation requirements in Articles 7 and 8 as regards the delegation regime laid down in Article 13 of this Directive, in particular with regard to preventing the creation of letter-box entities in the Union; (b) the appropriateness and impact on investor protection of the appointment of at least one non-executive or independent director to the management body of the UCITS management companies or investment companies; (c) the appropriateness of the requirements applicable to management companies managing a UCITS at the initiative of a third party as laid down in Article 14(2a) and the need for additional safeguards to prevent circumvention of those requirements, and, in particular, whether the provisions of this Directive on conflicts of interest are effective and appropriate in order to identify, manage, monitor and, where applicable, disclose conflicts of interest arising from the relationship between the management company and the third-party initiator.’ ; (18) Article 112a is amended as follows: (a) in paragraph 2, the following subparagraph is inserted after the first subparagraph: ‘The power to adopt the delegated acts referred to in Article 13 shall be conferred on the Commission for a period of four years from 15 April 2024.’; (b) paragraph 3 is replaced by the following: ‘3. The delegation of power referred to in Articles 12, 13, 14, 26b, 43, 50a, 51, 60, 61, 62, 64, 75, 78, 81, 95 and 111 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.’ ; (c) paragraph 5 is replaced by the following: ‘5. A delegated act adopted pursuant to Articles 12, 13, 14, 26b, 43, 50a, 51, 60, 61, 62, 64, 75, 78, 81, 95 and 111 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.’ ; (19) Annex I is amended in accordance with Annex III to this Directive; (20) the text set out in Annex IV to this Directive is inserted as Annex IIA.