The long anticipated UCITS IV Directive was required to be implemented by all EU Member States into their domestic legislation by 1 July 2011.
Following a significant period of engagement between the Central Bank of Ireland and the Irish funds industry and a consultation period in respect of the proposed revisions to the Central Bank’s notices and guidance notes, the UCITS IV Directive was transposed into Irish law by way of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (SI 352 of 2011) (the “Regulations”) with effect from 1 July 2011. The Regulations, in addition to transposing the Directive into Irish domestic law, also consolidate the existing Irish UCITS regulations into one piece of secondary legislation. In addition to the Regulations, the Central Bank also issued final versions of its UCITS notices and guidance notes on 1 July 2011 which incorporate the necessary amendments required to reflect the new UCITS IV changes.
Following such implementation, UCITS funds established in Ireland are subject to, and are positioned to avail of, the changes implemented by the Directive, many of them aimed at ultimately providing cost savings and benefits of economies of scale to UCITS funds and, ultimately, their shareholders.
It is notable, however, that while Ireland has fully implemented the Directive into its domestic legislation, that is not the case for a number of other EU Member States. Ireland was among only six Member States to have implemented the Directive by 1 July, the majority of countries having failed to meet this deadline. It is envisaged that a number of Member States will be implementing the Directive in the next three to five months. However, there are a number of Member States for which implementation dates have not yet been determined. This lack of implementation gives rise to regulatory uncertainty, particularly for funds domiciled in the jurisdictions which have missed the deadline, and it remains to be seen if this will have implications in practice.