22 November 2005

IMA welcomes adoption of principle-based approach to UCITS

The Investment Management Association (IMA) has submitted its response to the second consultation from CESR’s advice on clarification of definitions concerning eligible assets for investments of UCITS and welcomes the move to a more principle-based approach. However, IMA is concerned about the announced transitional provisions when the Commission adopts the revised definitions of eligible assets. The amendments to these definitions may require substantial changes to the internal processes of management companies. IMA has therefore recommended that in order to prevent significant disruption and reduce the costs of asset reallocation, CESR seriously needs to consider appropriate transitional provisions for all UCITS and not just those funds which will no longer be eligible under the Directive.

Sheila Nicoll, Deputy Chief Executive of the IMA, commented:

“Whilst some concern remains that the implementation of the UCITS Directive will continue to differ across EU member states, CESR’s efforts to streamline this implementation must be welcomed. CESR should be applauded for the way in which it has listened to the industry, and although some technical amendments still need to be ironed out, the adoption of a more light touch, principle-based approach should allow innovation in the UCITS market to continue.”

Full response

© Investment Management Association (IMA)