UCITS IV Publications


Article 12 of the CSSF regulation 10-4, transposing the European Directive 2010/43/EU of 1 July 2010, requires UCITS Management Companies to implement, applying a proportionality principle, a permanent and independent internal audit function. This Internal Audit function shall to be effective as from 1 July 2011.


Further to the adoption of the recast UCITS Directive (‘UCITS IV’) that is due to come into force in July 2011, the EU Commission issued on 1 July 2010 new level 2 regulations relating to the cross-border notification procedure for UCITS (‘Level 2 Regulations’).


With UCITS IV coming into force from July year, mergers of EU UCITS could soon become reality. But how will it work in practice?


Under UCITS IV, UCITS Management Companies (‘ManCos’, or individually ‘ManCo’) will be allowed to set up and operate on a remote basis UCITS funds established in another EU Member State. In July 2010, the Commission’s Level 2 Regulation (Regulation EU 583/2010) detailed the final measures related to the UCITS Management Company Passport (‘MCP’). The new legislative framework will impact all European ManCos – even those which do not intend to make use of the passport.


As from the 1 July 2011, UCITS will be authorised to adopt master-feeder strategies in view of pooling their assets and achieving economies of scales. Why would one consider a master-feeder strategy and what are the main business implications?


Further to the adoption of the Level 2 measures of the UCITS IV Directive that is due to come into force in July 2011, CESR issued in July 2010 a series of six technical advice papers related to the Key Investor Information Document (KIID as it is known among practitioners). A preferred layout and technical details are therefore beginning to take shape.

UCITS IV: Moving from basic Risk Management to Best Practices

The latest economic crisis has highlighted the need to improve the Risk Management processes and structures. More than trying to find the metric, Risk Managers and Board of Directors of Management companies will have to thoroughly understand their exposures and monitor them adequately.
How should they capture all risks and build an efficient Risk Management framework?

KID - Key Investor Information Documents

Asset managers launching UCITS will have to start using the KID instead of the simplified prospectus as a necessary pre-contractual document for fund distribution within the European Union. The implementation is subject to a grandfathering clause until July 2012, but for new UCITS the KID is due starting July 2011.
Given these impacts and the tight timing the KID appears to be one of the most important challenges for the UCITS industry over the last decade.

UCITS IV: Time for change

This document analyses the responses that were received in relation to the Key Information Document (KID). The findings demonstrate that the industry has not yet fully assessed the implications relating to the production of the KID and many requirements surrounding its production are deemed challenging.

Starting July 2011, UCITS IV implementing measures will introduce MiFID-like organisational and conduct of business rules and bring all Management Companies (ManCos) on the fast track to European harmonisation.

Since end of 2008, it is clear that UCITS IV will allow UCITS management companies to set-up and operate on a remote basis UCITS established in another EU Member State. On 28 October 2009 CESR published its technical advice to the EU Commission on implementing measures related to the UCITS Management Company Passport (MCP). The new legislative framework will impact all European UCITS Management Companies even those which do not intend to make use of the passport.

Further to the adoption of the recast UCITS Directive (“UCITS IV”) that is due to come into force in July 2011 and the CESR’s consultation paper published on 17 September 2009, mergers of UCITS domiciled in different EU countries of domicile will become a reality. But how will it work in practice?

Further to the adoption of the recast UCITS Directive (“UCITS IV”) that is due to come into force in July 2011, CESR issued on 17 September 2009 its consultation paper to the European Commission on level 2 measures relating to several topics inter alia the cross-border notification of UCITS (“CESR level 2 consultation paper”) inviting responses from the Industry by 17 November 2009.

There is no doubt that UCITS IV is a real opportunity to increase the European market efficiency in the field of UCITS.Indeed, cross-border promoters of UCITS will be entitled, as from 1 July 2011, to (i) reduce the time-to-market of their new UCITS products in Europe,(ii) pool their fund ranges currently domiciled in different EU jurisdictions and (iii) rationalize their processes and centres of excellence more freely and easily. However, UCITS IV is only a tool-box offering different options at the disposal of cross-border promoters and any related decision should be based on an in-depth diagnostic of strategic, marketing, regulatory and tax drivers.
UCITS IV

The investment fund industry has made an important step forward with the adoption of the UCITS IV Directive on June 22, 2009. While many details still need to be worked out even at the legislative level, industry players should now start considering the likely implications on their business. UCITS IV will become effective on July 1, 2011, being the date by which all Member States must have implemented the Directive into national law.