2 Jul 2010
The European Fund and Asset Management Association has announced that it very much welcomes the adoption of an efficiency package of UCITS IV “Level 2 measures” by the European Commission as an important further step towards a single market for the fund and asset management industry.
The UCITS IV “Level 2 measures” consist of two directives and two regulations covering: Key Investor Information; rules for the conduct of UCITS management companies; UCITS merger and master-feeder structures; and notification procedure and supervisory cooperation. Member States have until 1 July 2011 for the implementation of the directives into national law while the regulations will apply from 1 July 2011. This leaves asset managers relatively little time to adapt their operations and systems.
EFAMA also welcomes the publication of two sets of guidelines for UCITS IV by the Committee of Exchange and Securities Regulators. These are guidelines on the methodology for calculation of the ongoing charges figure in the Key Investor Information Document; and guidelines on the methodology for the calculation of the synthetic risk and reward indicator in the KID.
However, with tax and regulatory differences remaining between European Member States, the efficiency achieved by the UCITS IV “Level 2 measures” will be less than was originally aimed for. To provide pragmatic steps towards improving efficiency yet further, EFAMA together with accountancy firm KPMG, is currently finalising a study of tax barriers in Europe which hamper the full beneficial effect of the UCITS IV efficiency package.
The UCITS IV “Level 2 measures” consist of two directives and two regulations covering: Key Investor Information; rules for the conduct of UCITS management companies; UCITS merger and master-feeder structures; and notification procedure and supervisory cooperation. Member States have until 1 July 2011 for the implementation of the directives into national law while the regulations will apply from 1 July 2011. This leaves asset managers relatively little time to adapt their operations and systems.
EFAMA also welcomes the publication of two sets of guidelines for UCITS IV by the Committee of Exchange and Securities Regulators. These are guidelines on the methodology for calculation of the ongoing charges figure in the Key Investor Information Document; and guidelines on the methodology for the calculation of the synthetic risk and reward indicator in the KID.
Commenting on the adoption of the efficiency package, Peter De Proft, Director General of EFAMA, said: “UCITS IV is an excellent example of regulators, the European Commission and the industry working together in a very constructive way to improve the framework for asset managers and their products. The UCITS IV efficiency package will be very beneficial for restoring investor confidence.”
However, with tax and regulatory differences remaining between European Member States, the efficiency achieved by the UCITS IV “Level 2 measures” will be less than was originally aimed for. To provide pragmatic steps towards improving efficiency yet further, EFAMA together with accountancy firm KPMG, is currently finalising a study of tax barriers in Europe which hamper the full beneficial effect of the UCITS IV efficiency package.
