Compound Growth

© Compound Growth Limited 2012-2017

4th February 2016

FCA issues Final Rules for UCITS V Implementation

UCITS V becomes effective 18 March 2016 - final rules for implementation of UCITS V for depositaries, UCITS management companies and Alternative investment Fund Managers (AIFMs) now published.

The Financial Conduct Authority has this week released a Policy Statement (PS 16/2) in relation to the Implementation of the UCITS V Directive that affects managers and depositaries of UCITS and Alternative Investment Funds (AIFs).

Purpose of UCITS V

UCITS - undertakings for collective investment in transferable securities - are regulated investment funds which can be sold within the EU to the general public. It is therefore important that their standards of investor protection are commonly shared.

The new directive (UCITS V) will take effect in March 2016 and aims to increase the levels of confidence and protection for UCITS investors. To this aim, rules on the responsibilities for depositaries are being improved along with remuneration policy requirements being introduced for UCITS fund managers.

Furthermore, UCITS V looks to ensure that all regulators within the EU that are responsible for the supervision of UCITS and their fund managers have common powers to investigate and sanction any breaches.

For further reading, see our Summary of UCITS V main changes.

UCITS V Final Rules for managers and depositaries

In a previous Consultation Paper on UCITS V Implementation and Proposed Handbook Changes, the regulator consulted upon proposed rules and guidance for implementing the new directive. The consultation focused particularly upon the requirements applicable to management companies, (including transparency obligations towards investors and remuneration principles) in addition to the changes to the regime for depositaries, (including capital requirements for those firms that act as depositaries of UCITS and eligibility criteria).

In this week’s Policy Statement the regulator provides feedback to this consultation and lays out for UCITS managers and depositaries the final Handbook changes for implementing the directive’s requirements.

In addition, the regulator’s statement also sets out some final guidance for depositaries of AIFs plus provide the final rules for managers of non-UCITS retail schemes (known as NURS).

UCITS V is to be implemented by 18 March 2016 which is when the new rules guidance and Handbook changes will take effect.

UCITS V Implementation Finalised for AIFMs