CESR consultation on draft advice on the eligible assets of UCITS

18 March 2005

CESR published a consultation paper on its draft advice to the European Commission on clarification of definitions concerning eligible assets for investments of UCITS. CESR’s draft advice includes proposals on the eligibility of “structured financial instruments”, closed end funds, money market instruments (MMI) not dealt in on a regulated market.

Among others, CESR proposes that the UCITS should take into consideration some factors in deciding whether or not any security is a 'transferable security' and eligible for a UCITS. CESR furthermore suggests that where a listed closed end fund takes the form of a transferable security, it can be eligible for a UCITS, provided that some additional criteria concerning investor protection are met. Also, according to CESR’s proposal, it remains the responsibility of the UCITS to ensure whether a MMI that is not dealt in on a regulated market is an eligible asset.

The Commission’s mandate requested CESR to submit its advice by the end of October 2005.

Comments on the draft advice are welcomed by 10 June 2005. A public hearing will be held in Paris on 9 May.

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