EUROPE: CESR launches a consultation on simplification of the cross-border notification procedure of UCITS

Thursday October 27 2005

From CESR Press Release:

`In response to the concerns expressed by the European asset management industry regarding the way in which the national authorities apply in practice the requirements of the UCITS Directive, CESR Members are now turning their attention to developing common guidelines to streamline and simplify the notification process to sell a UCITS products cross border.

This first consultation paper therefore presents concrete proposals for a common approach to the administration, by host authorities, of the notification procedures set out in Art. 46 of the UCITS Directive. As such CESR has agreed on the key principle that the host Member State authority’s competences are confined to refusing the marketing of a foreign UCITS on its territory in case the marketing arrangements do not comply with the provisions referred to in Art. 44(1) and Art. 45 of the Directive. This would mean that other reasons, for instance those deriving from divergent interpretations on whether a UCITS complies with the Directive, can not be used as a reason to refuse the marketing.

The proposed arrangements seek to bring greater transparency and certainty to the notification process and aim to avoid uncertainty and prolongation of notification procedures. They do so, in particular by clarifying the way in which host authorities should communicate specific concerns regarding the compliance of UCITS with any applicable host law under Art. 44(1) and Art. 45 of the UCITS Directive. The proposals also enshrine common approaches to the documentation that must be submitted in the context of the notification procedure and to clarify the handling of sub-funds of umbrella funds.`