EIOPA Clarifies CIC 44 Versus CIC 42 Classification for Collective Investment Undertakings in S.06.0

Key Takeaways

• EIOPA has confirmed that undertakings should classify collective investment undertakings (CIUs) by first assessing whether the fund's prospectus and stated objective match the CIC 44 (Asset Allocation Funds) definition, rather than relying on look-through composition at the reporting date.
• If the fund meets that definition, it is CIC 44 regardless of its actual asset mix.
• If not, it defaults to CIC 42 (Debt Funds).
• This matters for S.06.02 reporting accuracy and consistency across reporting periods.

Deep Dive

EIOPA has confirmed that undertakings should classify collective investment undertakings (CIUs) by first assessing whether the fund's prospectus and stated objective match the CIC 44 (Asset Allocation Funds) definition, rather than relying on look-through composition at the reporting date. If the fund meets that definition, it is CIC 44 regardless of its actual asset mix. If not, it defaults to CIC 42 (Debt Funds). This matters for S.06.02 reporting accuracy and consistency across reporting periods.

EIOPA's answer sets a prospectus-first, definition-based test. Undertakings must classify an asset by the most representative risk to which it is exposed. They should then assess whether the fund's prospectus information matches the Annex VI definition of CIC 44, meaning a specific asset allocation objective such as particular sectors, countries, or other specific investment objectives. If it does, the fund is CIC 44 regardless of the exact asset composition. If it does not, the most representative risk is assumed to be fixed income, and the fund is CIC 42. In practice, daily or period-end look-through weights should not by themselves drive reclassification between CIC 44 and CIC 42. This also supports more stable classification over time.

No new deadlines are introduced. The guidance applies to ongoing S.06.02 submissions under the existing framework, and the question was submitted on 31 Jan 2025. Responsibility for correct CIC assignment remains with the individual undertaking, so firms should expect supervisors to look for a documented, defensible rationale.

Recommended actions for compliance and reporting teams:
- Review current CIC 42 and CIC 44 assignments for multi-asset, balanced, and income-oriented CIUs against the fund prospectus and stated objectives.
- Document the classification methodology, including the evidence used to determine whether a fund meets the CIC 44 definition.
- Identify funds that were classified by look-through prevalence and assess whether they need to be remapped.
- Update data vendor mappings and internal policies, and consider whether prior-period submissions need correction if material misclassification is found.

Risk implications: the main exposure is misclassification that affects data quality, supervisory comparability, and potentially the risk analysis built on S.06.02 data. The impact is moderate and mostly operational. Firms with sizable CIU portfolios, or those that have used look-through-driven classification, face the greatest remediation effort. Inconsistent treatment across periods could draw supervisory questions.

Source: European Insurance and Occupational Pensions Authority