CESR has published its advice to the Commission on the UCITS management company passport. The advice covers:

  • domicile of the management company (which should follow the MiFID approach to domicile) and the UCITS (which should be the state in which it has received authorisation); 
  • applicable law and allocation of supervision: CESR recommends which "home state" laws of the relevant UCITS the manager should follow where it manages a UCITS cross-border. These include the rules on investment limits and valuation; 
  • how to authorise UCITS established in a different Member State to their manager: this builds in a mechanism for the regulator in the UCITS home state to check the manager is suitable for the specific fund despite the general right of any UCITS manager to manage a UCITS in any other Member State; 
  • continuing manager supervision: CESR's advice allows for each relevant supervisor to get the right information; and 
  • dealing with management breaches: CESR wants to allow the UCITS supervisor to take direct action to enforce some kind of management breach.

CESR sent the advice to the Commission with a covering letter that explains it could not run its usual full consultation exercise because the Commission needed urgent advice. Several CESR members, including Ireland and Luxembourg, are not happy with at least some of its recommendations.