July 6, 2018

UCITS Q&A – Investment in Non UCITS Investment Funds

On 5 July 2018, the Central Bank published the twenty third edition…

On 5 July 2018, the Central Bank published the twenty third edition of the Central Bank UCITS Q&A (link). Of note are Question ID’s 1002 & 1003;

ID 1002

Q. Must the non-UCITS investment fund include conforming provisions in its constitutional document in order to be eligible for investment by a UCITS or is it sufficient for the non-UCITS investment fund to operate in practice in a manner which complies with the requirements of Regulation 68(1)(e)?

A. The UCITS Regulations require that the constitutional document of the non-UCITS fund in which it is intended to invest includes a prohibition on investing more than 10% of its assets in other investment funds. A non-UCITS investment fund must also be subject to requirements in its jurisdiction of domicile which are equivalent to UCITS investor protections in order to comply with Regulation 68(1)(e). Alternatively, the nonUCITS fund must have requirements of the same effect in its constitutional document or offering document. A statement of the intended investment approach does not constitute a rule for this purpose.

ID 1003

Q. Guidance Note 2/03 on ‘UCITS – Acceptable investments in other collective investment undertakings’ lists categories of non-UCITS investment funds which are eligible for investment by UCITS. This list includes nonUCITS investment funds authorised in the US and which comply, in all material respects, with the provisions of the UCITS Notices. What category of US investment funds is being referred to?

A. Guidance Note 2/03 is referring to US investment funds which are subject to The Investment Company Act of 1940. It will be up to the UCITS to determine whether a specific US investment fund satisfies the requirements of Regulation 68(1)(e)

The CBI on issuing noted; “UCITS should be in compliance with this revised Q&A as soon as possible taking into account the best interests of the investors. In any event, compliance should be ensured no later than 5 October 2018.

Thanks for reading. If you would like to learn more about our services or arrange to a consultation with one of our leading experts, get in touch by speaking to a Bridge Consulting specialist. Speak with a Specialist

Download full document

The above is a snippet from the full document. If you'd like to read the whole thing, please enter your email below to receive a link to the full article. By entering your email you agree to signing up for our Newsletter.


    Similar Articles

    Publication
    Article 3 on CP86 – The 3 Yr Journey – Directors Time Commitments 10 May 2017
    Publication
    BFML Announcement 12 October 2016
    Publication
    CBI 2016 Themed Inspections 23 November 2015