The insurance-linked securities (ILS) industry has come together to respond to the European Securities & Markets Authority (ESMA) call for evidence to support a review of the Undertakings for Collective Investment in Transferable Securities (UCITS) Eligible Assets Directive (EAD), highlighting the reasons catastrophe bonds are beneficial assets for investors and suitable assets for UCITS strategies.
Recall that, ESMA launched its call for evidence on UCITS eligible assets back in May this year, asking for information from stakeholders to assess any possible risk and benefits of UCITS gaining exposure to certain alternative asset classes.
Catastrophe bonds are a relatively small component of the overall UCITS fund assets universe, which by ESMA’s numbers consist of more than €9 trillion of assets under management.
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