UCITS IV

The law of 17 December 2010 on undertakings for collective investment transposes the European UCITS directive of 13 July 2009 known as UCITS IV (DIR 2009/65/EC) into national law.

The directive aims to harmonise the rules governing UCITS and to improve the way their distribution functions within the the European Union.

The directive will significantly update the existing Directive 85/611/EEC by modernising the regulatory framework with a view to:

  • assuring adequate protection for investors through more coherent, clearer, correct and comprehensible information in relation to market evolutions,
  • maintaining the fund industry’s competitiveness by adapting the regulatory framework of the market,
  • paving the way for cost reductions, while safeguarding a diversified investment product for investors.

In general, the European Investment fund industry needs to enhance its competitiveness by improving the quality of its services and reducing costs.

The UCITS IV Directive deals with the following points:

  • management company passport,
  • cross-border mergers,
  • asset grouping by means of joint structures (master-feeders)
  • simplified authorisation procedures,
  • replacement of the simplified prospectus: Key Investor Information or Key Investor Disclosure (KID),
  • measures concerning implementation.

These measures are applicable since 1 July 2011, insofar as each member state has transposed them by that date.

As regards measures for execution, the European Commission has mandated the ESMA (European Securities and Markets Authority) to study the content of different measures and to draw up proposals. The member states will then be invited to transpose these execution measures at the same time as the UCITS IV Directive itself.