However, the host state rules on the distribution of the units have to be complied with ex post control of the host state regulator. It is unquestionably the case that some of the most popular UCITS products, such as managed futures and equity long-short, are naturally aligned to the liquidity provisions of the UCITS directive.
There are operational considerations too. Physical short selling is not permitted but the investment rules do allow for access to short exposure through the use of eligible derivatives, typically via swaps or contracts for differences. While the traditional prime brokerage model is not an option, funds may employ a synthetic prime brokerage model to facilitate access to short selling and leverage.
With all of this, it is key that managers ensure that they have an appropriate risk management plan in place to manage liquidity, leverage and counterparty risk within UCITS requirements. Europe is by far the largest market for UCITS sales and the vast majority of European countries have seen growth in the number of funds registered for sale in recent years. It is the most popular offshore fund brand in Asia and the three major cross border fund centres of Hong Kong, Singapore and Taiwan are the main centres for distribution in the region.
The brand is also increasingly popular with Asian managers looking to secure European capital in Asia focused funds. While Stock Connect is another exciting opportunity for investors to gain access to the Chinese mainland market via Hong Kong, there are threats in Asia too, including initiatives to launch a regional equivalent via the establishment of passporting schemes for Asian funds. As long as it does, and as alternative strategies continue to become more mainstream, then UCITS is likely to continue to see interest from investors looking for hedge fund returns in a regulated product.
With an extensive distribution model that supports distribution of Irish UCITS funds to 70 countries globally today, Ireland has the infrastructure in place to act as a gateway to new markets for managers launching a UCITS product. Irish Funds Member Portal Access. The reality differed somewhat from the expectation due primarily to individual marketing rules in each Member State that created obstacles to cross-border marketing of UCITS.
Accordingly, in the early s proposals were developed to amend the Directive and more successfully harmonise laws throughout Europe. These discussions, although leading to a draft UCITS II directive, were subsequently abandoned as being too ambitious when the Council of Ministers could not reach a common position. In July the EU Commission published a new proposal which was drafted in two parts a product proposal and a service provider proposal , which sought to amend the Directive.
It also introduces the concept of a simplified prospectus , which is intended to provide more accessible and comprehensive information in a simplified format to assist the cross-border marketing of UCITS throughout Europe.
The concept is to create a single funds market across the EU. The aim is that with a larger market the economies of scale will reduce costs for investment managers which can be passed on to consumers. The depositary may delegate its safekeeping functions but not other depositary functions to a third party custodian. This law of 10 May amended the Luxembourg law of 17 December on undertakings for collective investment, as amended the " Law" , in particular, Parts I, IV and V of the Law.
In summary, these are the topics raised: Such conversions may lead to a significant change in the investment strategy. From Wikipedia, the free encyclopedia. Institutions for Occupational Retirement Directive Undertakings for Collective Investment Directive