UCITS: Difference between revisions

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{{tag|UCITS}} funds must meet strict criteria as to how they are set up, managed and marketed, and as to the portfolio of asset a {{tag|UCITS}} fund is allowed to invest in: There are concentration limits and other criteria which ensure diversity of risk; assets must be liquid, there should be very limited use of [[leverage]] and the fund must ensure it has diverse exposure to trading counterparties, banks and so on.
{{tag|UCITS}} funds must meet strict criteria as to how they are set up, managed and marketed, and as to the portfolio of asset a {{tag|UCITS}} fund is allowed to invest in: There are concentration limits and other criteria which ensure diversity of risk; assets must be liquid, there should be very limited use of [[leverage]] and the fund must ensure it has diverse exposure to trading counterparties, banks and so on.


The most recent UCITS legislation is {{tag|UCITS V}}, ({{eudirective|2014|91|EU}}). But also relevant is {{tag|UCITS IV}}, {{eudirective|2009|65|EC}}.
The most recent UCITS update is {{tag|UCITS V}}, ({{eudirective|2014|91|EU}}), which has specific implications for Custodians and depositaries, and was driven in part by the fallout from [[Madoff]]. But the bulk of {{tag|UCITS IV}}, set out at {{eudirective|2009|65|EC}}, is still in force.
 
From Article 1(2) of {{eudirective|85|611|EEC}} [http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1985L0611:20080320:EN:PDF Council Directive (85/611/EEC)] of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities ({{tag|UCITS}})
 
{{box|For the purposes of this Directive, and subject to Article 2, {{tag|UCITS}} shall be undertakings:
*the sole object of which is the collective investment in transferable securities and/or in other [[UCITS liquid financial assets|liquid financial assets]] referred to in [[UCITS liquid financial assets|Article 19(1)]] of capital raised from the public and which operates on the principle of risk-spreading and
*the units of which are, at the request of holders, re-purchased or redeemed, directly or indirectly, out of those undertakings' assets. Action taken by a {{tag|UCITS}} to ensure that the [[stock exchange]] value of its units does not significantly vary from their net asset value shall be regarded as equivalent to such re-purchase or redemption.}}


==={{tag|UCITS IV}}===
==={{tag|UCITS IV}}===
UCITS IV is the common name for {{eudirective|2009|65|EC}} passed by the European Parliament and of the Council of 13 July 2009. It was subsequently amended by...
UCITS IV is the common name for {{eudirective|2009|65|EC}} and {{eudirective|2014|91|EU}}, passed by the European Parliament and of the Council of 13 July 2009. It was subsequently amended by...
==={{tag|UCITS V}}===
==={{tag|UCITS V}}===
On 23 July 2014 the [[European Union]] adopted {{eudirective|2014|91|EU}} on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities ({{tag|UCITS}}) as regards depositary functions, remuneration policies and sanctions.
On 23 July 2014 the [[European Union]] adopted {{eudirective|2014|91|EU}} on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities ({{tag|UCITS}}) as regards depositary functions, remuneration policies and sanctions.

Revision as of 13:39, 24 August 2017

Not to be confused with AIFs

Compare and contrast alternative investment funds which are regulated under AIFMD, which are professionals-only funds (hedge funds etc). The regulations are in some ways converging, but there are still a lot of qualitative differences in the types of risks that an AIF can take compared to a UCITS.

See: Depositary comparison under AIFMD and UCITS


UCITS - or "undertakings for the collective investment in transferable securities" - are regulated European investment funds, generally aimed at retail investors.

UCITS funds must meet strict criteria as to how they are set up, managed and marketed, and as to the portfolio of asset a UCITS fund is allowed to invest in: There are concentration limits and other criteria which ensure diversity of risk; assets must be liquid, there should be very limited use of leverage and the fund must ensure it has diverse exposure to trading counterparties, banks and so on.

The most recent UCITS update is UCITS V, (2014/91/EU (EUR Lex)), which has specific implications for Custodians and depositaries, and was driven in part by the fallout from Madoff. But the bulk of UCITS IV, set out at 2009/65/EC (EUR Lex), is still in force.

===UCITS IV=== UCITS IV is the common name for 2009/65/EC (EUR Lex) and 2014/91/EU (EUR Lex), passed by the European Parliament and of the Council of 13 July 2009. It was subsequently amended by... ===UCITS V=== On 23 July 2014 the European Union adopted 2014/91/EU (EUR Lex) on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions.

This directive introduces new rules on UCITS depositaries, such as the entities eligible to assume this role, their tasks, delegation arrangements and the depositaries’ liability as well as general remuneration principles that apply to fund managers.

The depositary as a specific function under UCITS legislation (rather as it does under AIFMD). The depositary may delegate its functions to a third party custodian - as to which see sub-custodian.

See Also

UCITS Anatomy™

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