Supervision release 24 March 2022 – 17/2022

Thematic review: UCITS’ costs and fees

The Financial Supervisory Authority (FIN-FSA) has conducted a thematic review of UCITS’ costs and fees. The purpose of the thematic review was to carry out a supervisory action of the European Securities Markets Authority (ESMA) in selected management companies concerning two subject areas: funds’ pricing processes and the use of efficient portfolio management techniques (EPM).

The key findings of the thematic review include the following:

  • Funds’ cost structures are clear and simple, which inhibits the charging of inappropriate and undue costs from investors.
  • As a rule, pricing by management companies is based on competitive and market conditions. For example in the firms’ internal processes, less attention is paid to the assessment of investors’ interests in the context of setting costs and fees.
  • The management companies selected to the sample did not have written pricing guidelines and processes. Furthermore, there were shortcomings in the documentation provided by the firms on their internal processes.
  • Information required in key investor information documents among other things on the fund’s activeness, benchmark and past performance was mainly presented well.
  • Some of the firms had shortcomings in providing a clear description of their internal pricing, i.e. what items the costs consist of.
  • The level of costs and fees across different fund categories appear consistent and coherent. A few funds included in the sample stood out with relatively high costs.
  • No significant shortcomings were found in arrangements related to the use of efficient portfolio management techniques.

The sample of the thematic review included five management companies, two of which also responded to the section concerning EPM. Information was requested on 39 share classes in UCITS managed by the management companies.

Regulation concerning UCITS1 requires that management companies manage UCITS in line with the best interests of the fund and its unitholders. In pursuing their activities, management companies must treat unitholders equally. The management company must ensure that UCITS’ pricing models are equal, appropriate and transparent. The management company must act in a way preventing undue costs from being charged to the investment fund and the unitholders. The rules of the UCITS must define the costs and fees that may be charged to the UCITS, and their maximum amounts.

The guidance2 provided by ESMA to supervisory authorities in summer 2020 (hereinafter Supervisory briefing) describes the expectations posed to pricing processes and practices at a more detailed level.

Subsequent measures by FIN-FSA

The FIN-FSA requests management companies to discuss the observations and application examples provided in the appendix and to take appropriate measures regarding the shortcomings.

The FIN-FSA reports on the findings and conclusions to ESMA as part of the ESMA supervisory action. In addition to that ESMA may provide more detailed guidelines to management companies or national supervisors on the subject.

For further information, please contact

  • Merja Junnonen, Senior Legal Advisor, merja.junnonen(at)
  • Kristian Nihtilä, Senior Policy Advisor, kristian.nihtila(at)


ESMA Supervisory briefing – application examples on the preparation of guidelines for management companies concerning the pricing process

1Mutual Funds Act (213/2019) chapter 4, section 2(1) and FIN-FSA regulations and guidelines (3/2011 chapter 4.10, paragraphs (65)–(66). The management company shall act in such a way as to prevent undue costs being charged to the investment fund and its unitholders.