The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the UCITS Regulations 2011) became law in Ireland on 1 July 2011. The UCITS Regulations give effect to Directive 2009/65/EC (the UCITS IV Directive).
The period prior to 1 July was a very busy time for UCITS and their respective service providers to ensure business plans were UCITS IV compliant. While the waters have settled somewhat since that time however there are other aspects of UCITS IV that merit discussion, including the revised "outward marketing" requirements set out in the UCITS Regulations 2011.
Central Bank - UCITS Outward Marketing Requirements
Post UCITS IV, the process for the registration of UCITS in Member States outside its home Member State is now completed via communication between the respective Regulators.
The process is as follows:
- Each Member State has its own form of Notification Letter which sets out the information and documentation which a foreign UCITS will need to provide in order to be approved for distribution in that Member State. Once all the ancillary documentation has been collated this is submitted to the Home State Regulator together with the Notification Letter (the Notification File).
- When an Irish UCITS makes an application to distribute in another Member State it submits a Notification File, in the format prescribed by the host Member State, to the Central Bank in Ireland which initiates the process of registration.
- The Central Bank must verify the completeness of the Notification File and transmit it by email together with an attestation to the Host Regulator within 10 working days of receipt of the documentation from the UCITS.
- Following the successful transmission of the Notification File, the Central Bank shall immediately notify the UCITS and the UCITS may access the market of the Host Regulator from the date of the notification.
- In Ireland, the Central Bank has published its form of Notification Letter on its website as have many of the financial regulators in the various EU Member States.
Content of Notification Files
The Central Bank recently issued a letter of clarification to the Irish Funds Industry Association to assist UCITS when collating a Notification File. The main points raised were as follows:
- The Central Bank has asked that the Notification Letter is completed in typed print;
- Details are only required in relation to those sub-funds the shares of which it is intended will be marketed in the foreign jurisdiction;
- A UCITS should only attach those documents which specifically relate to the sub-funds to be marketed in the relevant foreign jurisdiction (this point relates to UCITS with a large number of sub-funds under one umbrella where it is not intended to market all of the sub-funds in the relevant jurisdiction;
- The UCITS will need to deposit all those documents forming the Notification File on a dedicated website and a link must be provided to the Central Bank. It is not enough to give the Central Bank a generic link i.e. you must specify the exact web address where the documentation can be located; and
- The Notification Letter must be signed and dated and the signatory's capacity must be set out.