EU offers relief on reporting deadlines for funds in pandemic

LONDON (Reuters) - Investment funds should not face enforcement action by their national regulators for failing to meet reporting deadlines during the pandemic lockdown, the European Union's markets watchdog said on Thursday.

EU-regulated mutual funds - known as UCITS - account for more than 9 trillion euros in assets and are required to publish audited annual reports with four months of their financial year end, which would be April 30 if that was Dec. 2019.

They are also required to publish half-yearly updates that do not have to be audited.

The European Securities and Markets Authority (ESMA) said it was aware that lockdowns in member states to prevent COVID-19 contagion present significant difficulties for fund managers and auditors to meet reporting deadlines.

"In the current situation, ESMA expects national competent authorities to adopt a risk-based approach and not prioritise supervisory actions against these market participants in respect of the upcoming reporting deadlines," the regulator said in a statement.

Funds with a December year-end will have an extra two months to publish annual reports, with an extra month for half-yearly updates.

"ESMA will continue to closely monitor the situation and will take or recommend any measures necessary to mitigate the impact of COVID-19 on timely and appropriate periodic disclosure by fund managers in respect of the funds they manage or market."

The relief also covers alternative investments like hedge funds and private equity.

(Reporting by Huw Jones, Editing by Maiya Keidan and Angus MacSwan)