ESMA practical arrangements for the late transposition of UCITS IV |
ESMA issues opinion
While the deadline for transposition of UCITS IV was 1st July 2011, most EU member states have yet to fully transpose the Directive.
This creates challenges for fund promoters seeking to avail of the cross-border provisions under UCITS IV and with this in mind ESMA has issued an opinion proposing a number of practical arrangements.
The practical arrangements should assist with new UCITS notifications but challenges will remain, particularly in relation to the management company passport, cross-border mergers and master-feeder structures until member states have fully implemented UCITS IV.
Key elements of ESMA’s opinion:
• A host member state authority cannot refuse a valid notification under UCITS IV even if that member state has not transposed the Directive
• A non-transposing home member state cannot automatically notify under UCITS IV but ESMA will develop a template to be used by authorities of non-transposing member states
• UCITS management companies established in a transposing member state should be able to create a fund via the management company passport in a member state where the Directive has not been transposed
• Management companies established in a non-transposing country can make use of the management company passport only if the current national legislation materially complies with the relevant provisions of the Directive
• Cross-border mergers involving a UCITS established in a member state that has not transposed the Directive are not possible on the sole basis of the direct applicability of the Directive
• Mergers of UCITS located within the same non-transposing member state where at least one of the two UCITS is marketed in another member state, may be possible if current national legislation materially complies with the Directive
• ESMA is of the view that master-feeder structures cannot be used where one of the member states involved has not transposed the Directive
For further information contact a member of our team.
ESMA Opinion
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