Towards UCITS VI...The European Commission reopens UCITS debate

01 August 2012

On 26 July 2012, the European Commission published a consultation on UCITS, focusing on product rules, Liquidity management, depositary, money market funds and long-term investments policies. In short, a large scope of UCITS issues.

The deadline to answer this consultation is 18 October 2012. The European Commission will then analyse the contributions to the consultation and intends to present legislation on these issues as early as the end of the year. It is also rumoured that it is considering proposing a Regulation this time, as it has done for most of the recent regulatory initiatives in the financial sector.

This consultation is dealing with other UCITS topics than those included in the UCITS V proposal, published on 3 July 2012, which focuses on depositary liability, sanctions and remunerations and fully review the content of the whole package/framework. During the process leading to the publication of the UCITS V proposals, it was rumoured that the European Commission would extend the scope of is proposal to include product rules issues for instance, but the Commission has instead decided to publish a separate document and, according to Commissioner for Internal Market and Services Michel Barnier, open the UCITS issue with "no taboos".

The UCITS consultation is closely linked to the shadow banking regulatory stream that the European Commission is currently working on, and some of the questions posed in this consultation document result from the European Commission's analysis of the answers received to its consultation on a Green Paper on shadow banking in March 2012.

This consultation focuses on:

1. Eligible assets and use of derivatives;
2. Efficient portfolio management techniques;
3. OTC derivatives;
4. Extraordinary Liquidity management rules;
5. Depositary passport;
6. Money market funds;
7. Long term investments;
8. Addressing some of the issues of UCITS IV, namely assessment of whether or not rules concerning the management company passport, master feeder structures, fund mergers and notification procedures might require improvements.

Press release

Consultation

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