Thursday April 17 2014
News Source: Fund Regulation
Focus: UCITS
Type: General
Country: European Union
The European Parliament has adopted in plenary session an amended Directive on the coordination of laws, regulations and administrative provisions relating to the undertakings for collective investment in transferable securities as regards depositary functions, remuneration policies and sanctions, known as UCITS V. The new rules will strengthen the protection of investors vis-à-vis managers of UCITS funds and other depositaries. It will also ensure that appropriate sanctions are in place for those who break the law.
Key Elements of the UCITS V Directive include:
• Strengthened rules on eligible entities that act as a depositary.
• UCITS assets will be protected in the event of insolvency of the depositary through clear segregation rules and safeguards provided by insolvency laws of the Member States.
• The depositary’s liability has been strengthened. UCITS investors will have the right to redress directly against the depositary.
• Remuneration policies for all risk takers involved in managing UCITS funds have been introduced so remuneration practices do not encourage excessive risk taking, rather effective risk management.
• The agreement strengthens the existing regime to ensure effective and harmonised administrative sanctions.
Following the vote in plenary, the adoption of UCITS V is subject to formal approval by the Council.
In addition, the European Commission have also published a set of frequently asked questions regarding the UCITS V, covering general background information on the UCITS, UCITS depositaries, importance of a UCITS depositary to investors and the amendments UCITS V seeks to make.
Click on the above links for further details.