Sunday December 4 2011
News Source: Fund Regulation
Focus: AIFMD
Type: General
Country: European Union
Relevant Directive Rule
The relevant UCITS Directive article for this rule (Article 54.1) for which a link is provided below..
Overview
The directive states that a UCITS must hold securities from six differing issues but that securities from any single issue shall not account for more than 30% of the total assets.
Therefore there is no prohibition set out in the directive preventing the six differing issues coming from a single GAPs as long as there is no more than 30% of Nav in any single issue. For example if 100% of Nav was invested in a single GAPS issuer, I could meet the requirements by having the following holdings, Issue 1 (30%), Issue 2 (30%), Issue 3 (30%), Issue 4 (5%), Issue 5 (4%), Issue 6 (1%).
However, from a diversification point of view it would be recommended that the securities should be spread across differing GAPS issuers but this is not a requirement.
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