ESMA publishes an opinion on practical arrangements for the late transposition of the UCITS IV Directive

13 October 2011

Without prejudice to any initiatives taken by the European Commission in case of late transposition by Member States, ESMA intends to address the situation at an operational level in order to minimise, as far as possible, the impact on industry and investors deriving from lack of transposition.

The deadline for the transposition of the UCITS IV Directive into national legislation was 1 July 2011. However, most Member States (MS) have not yet fully transposed the Directive and its implementing measures. Late transposition can create difficult situations where some competent authorities may not have the legislative framework in place to allow a proper implementation of the Directive.

ESMA has identified the following issues which could be addressed via practical arrangements between competent authorities:

• A UCITS management company in a MS where the Directive has been transposed may not be able to use the management company passport if the MS in which the management company wants to create a fund has not transposed the Directive.
• Competent authorities of MS that have transposed the Directive may have difficulties notifying the marketing of UCITS established in their jurisdictions to other competent authorities if the host MS has not transposed the Directive.
• A competent authority of a MS that has transposed the Directive may receive a notification for a UCITS from a competent authority of a MS that has not transposed the Directive.
• A UCITS management company of a MS where the Directive has not been transposed could not create a feeder fund with a master fund established in another EU jurisdiction.
• Similarly, a UCITS management company of a MS where the Directive has not been transposed could not merge one of its UCITS (merging UCITS) with a UCITS established in another EU jurisdiction.

Full opinion

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