The European Fund and Asset Management Association (EFAMA) has urged European Union policymakers to leave the status of catastrophe bonds unchanged in the UCITS Eligible Assets Directive (EAD), calling the asset class a “precious diversifier” and saying that “limiting asset choice within UCITS per se is not in investors’ best interest.”
EFAMA, a trade association that represents the EUR 33 trillion European investment management industry, has issued a paper in response to the European Securities and Markets Authority’s (ESMA) technical advice regarding cat bond eligibility under the UCITS investment framework.
Recall that, ESMA made a recommendation in June 2025 to the European Commission, not to allow catastrophe bonds as eligible assets in UCITS funds, a move that has generated wide-attention across the insurance-linked securities (ILS) industry.
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