On 22 June 2009, the Council of the European Union issued a press release stating that it had adopted a Directive on undertakings for collective investment in transferable securities (UCITS) following a first-reading agreement with the European Parliament.

The aim of the Directive is to modernise the regulatory framework applicable to UCITS in order to:

  • Offer investors a greater choice of product at lower cost through better integration of the internal market.
  • Provide investors with suitable protection through high-quality information and more efficient supervision.
  • Maintain the competitiveness of the European fund industry by adjusting the regulatory framework to developments in the market.

Against this background the text of the new Directive is aimed at fulfilling the following objectives:

  • Improve investor information by creating a standardised summary information document (key information for investors).
  • Create a genuine European passport for UCITS management companies.
  • Facilitate cross border marketing of UCITS by simplifying administrative procedures.
  • Facilitate cross border mergers of UCITS which will make it possible to increase the average ize of European funds.
  • Facilitate asset pooling by creating a framework for the system of “master-feeder” arrangements whereby a fund invests more than 85 per cent of its assets in another fund.
  • Strengthen the supervision of UCITS and of the companies that manage them by means of enhanced cooperation between supervisors. The Directive encourages the exchange of information between supervisors, harmonises the powers of supervisors, and allows for the possibility of on-the-spot investigation, consultation mechanisms and mutual aid mechanisms for the imposition of penalties.

View Council improves rules for EU investment funds, 22 June 2009