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December 22, 2010

FSA and HM Treasury publish joint consultation paper on implementation of UCITS IV Directive

The Financial Services Authority ("FSA") and HM Treasury ("HMT") have published a joint consultation paper setting out proposals for the implementation of the revised UCITS IV Directive.

The UCITS IV Directive modernises the regulatory framework and procedures for selling retail investment funds cross-border in Europe. It must be implemented into national law by all EU member States by July 1, 2011.

UCITS IV introduces the following changes:

  1. a UCITS management company will be allowed to operate a UCITS fund authorised in a different EU Member State, without the need to be established in the Member State of the fund;
  2. the simplified prospectus will be replaced with a key investor information document;
  3. administrative barriers to the cross-border marketing of UCITS will be removed;
  4. a framework for mergers between UCITS funds will be created;
  5. provision will be made for 'master-feeder' structures, where a UCITS fund (feeder) will be allowed to invest the majority of its assets into another UCITS fund (master);

measures to improve co-operation between national regulators will be introduced.

Responses to the HMT and FSA consultation paper must be received by March 21, 2011.

Date December 22, 2010

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