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Significance of UCITS Fund Distribution
In simple terms, the UCITS is a type of mutual fund which is followed in the European Union (EU). Here UCITS denotes “Undertakings for Collective Investment in Transferable Securities.” According to the rules and regulations of EU, these UCITS funds can be easily sold to an investor within the European Union without the requirement for additional authorisation.
Moreover, in the individual European countries, the UCITS fund providers who are able to meet the stipulated standards are exempt from national regulations. The UCITS fund distribution is a type of collective investment scheme which is established and authorised by the EU legal framework. The AIFMD marketing passport has been introduced under the Directive 2011/61/EU for the EU countries to aid the UCITS fund distribution.
History of UCITS Fund Distribution
In the European Union, the UCITS was first proposed on December 20, 1985, with an aim to facilitate the retail investors with the help of cross-border investment funds. It was thought that these funds would harmonise the retail fund regime within EU for their sale on a cross-border basis. By the early 1990s, the proposals for the modifications in the directives were made, but they were never fully adopted by the member countries.
In 2002, two more directives of the UCITS funds, 2001/107/EC and 2001/108/EC were proposed to broaden the investment spectrum. Finally, on March 18, 2016, the UCITS was transposed into national law of member states to further enhance the harmonisation process.
Impact of Brexit on UCITS
On June 2016, after a majority vote at the referendum held in the United Kingdom, Britain decided to withdraw itself from the European Union by a so-called Brexit process. This had a large-scale impact on the UCITS fund distribution as well. The investors are advised to take a note of the different guidelines proposed through Brexit and plan accordingly.
According to the latest directives of Brexit, the UK UCITS funds would no longer be able to be marketed in the member states of European Union on the basis of AIFMD marketing passport. The same thing would happen with the European UCITS funds which wanted to be marketed in the UK. According to the Financial Services Markets Act of UK, if these European UCITS funds intend to be marketed in the UK they have to follow certain guidelines of foreign funds on an individual basis.
So, this was the significance of UCITS fund distribution in short.
Moreover, in the individual European countries, the UCITS fund providers who are able to meet the stipulated standards are exempt from national regulations. The UCITS fund distribution is a type of collective investment scheme which is established and authorised by the EU legal framework. The AIFMD marketing passport has been introduced under the Directive 2011/61/EU for the EU countries to aid the UCITS fund distribution.
History of UCITS Fund Distribution
In the European Union, the UCITS was first proposed on December 20, 1985, with an aim to facilitate the retail investors with the help of cross-border investment funds. It was thought that these funds would harmonise the retail fund regime within EU for their sale on a cross-border basis. By the early 1990s, the proposals for the modifications in the directives were made, but they were never fully adopted by the member countries.
In 2002, two more directives of the UCITS funds, 2001/107/EC and 2001/108/EC were proposed to broaden the investment spectrum. Finally, on March 18, 2016, the UCITS was transposed into national law of member states to further enhance the harmonisation process.
Impact of Brexit on UCITS
On June 2016, after a majority vote at the referendum held in the United Kingdom, Britain decided to withdraw itself from the European Union by a so-called Brexit process. This had a large-scale impact on the UCITS fund distribution as well. The investors are advised to take a note of the different guidelines proposed through Brexit and plan accordingly.
According to the latest directives of Brexit, the UK UCITS funds would no longer be able to be marketed in the member states of European Union on the basis of AIFMD marketing passport. The same thing would happen with the European UCITS funds which wanted to be marketed in the UK. According to the Financial Services Markets Act of UK, if these European UCITS funds intend to be marketed in the UK they have to follow certain guidelines of foreign funds on an individual basis.
So, this was the significance of UCITS fund distribution in short.