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Introducing a Management Company Passport could deliver advantages to the UCITS regime, but could be outweighed by significant potential costs and risks, ALFI warns. Moving away from a “product-centred” regulatory approach is not a simple exercise and necessarily alters and potentially weakens oversight integrity, the association states.
Responding to the CESR consultation on the management company passport ALFI underlines that more time is needed “to examine thoroughly, deliberately and exhaustively the legal, fiscal and regulatory issues raised”, warning that “the global credibility of the UCITS ‘brand’ would suffer.”
However, the current UCITS draft directive will provide significant operating and cost improvements to the UCITS regime, without weakening investor protection, ALFI states. Provisions in the draft directive are independent of the Management Company Passport question.
ALFI, therefore, believes that it is of vital importance to all parties associated with UCITS that these measures are passed into law as soon as possible.