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01 November 2008

CESR response on UCITS management company passport

The advice is supported by a large majority of CESR members and includes several references to potential implementing measures to be adopted by the Commission at Level 2. However, five countries voted against it.

CESR publishes its advice to the Commission on the UCITS management company passport. The advice includes several references to potential implementing measures to be adopted by the Commission at Level 2. It is supported by a large majority of CESR members.


The five chapters of the advice cover the definition of domicile, applicable law and allocation of supervisory responsibilities, authorisation procedure for UCITS funds whose management company is established in another Member State, on-going supervision of the management of the fund, and dealing with breaches of rules governing the management of the fund.


A number of CESR members have voted against the advice - Ireland, Luxembourg, Poland, Slovakia and Slovenia – as they are of the view that the recommendations could result in establishing “empty boxes” and that more substance is necessary to ensure of the legal existence of the UCITS.


The proposed split of supervisory tasks and responsibilities does not ensure that the UCITS competent authority will be able to effectively supervise the remote management company, they argue.


The local point of contact is insufficient to help the UCITS competent authority to perform its supervisory tasks or to ensure proper investor protection, they say.


Key issues:

CESR sets out detailed provisions to ensure clarity on the home Member State of the management company, the UCITS and the depositary. This includes the introduction of a local point of contact concept, which should be put in place for remotely managed contractual funds.


CESR also sets out detailed provisions on the applicable law and allocation of responsibilities both in the case of free provision of services and services provided via a branch. These provisions should facilitate co-operation between competent authorities, including mutual delegation of supervisory tasks and the possibility to establish colleges of supervisors.


With regard to the authorisation procedure for UCITS funds the advice sets out the procedure to be followed when a UCITS is authorised under the framework of the management company passport. This includes provisions on the conditions under which the competent authority of the UCITS home Member State should approve the choice of the management company.


CESR’s advice sets out detailed provisions on the flow of information from the entities involved to the competent authorities, and among the entities themselves. There are also provisions relating to the role of auditors in the context of the passport.


The advice also covers circumstances in which a competent authority wishes to take enforcement action against an entity established in a different Member State. There are also specific provisions designed to ensure fair treatment of unit-holders in the case of an infringement.


Press release

Final advice

Letter to the Commission


© CESR - Committee of European Securities Regulators

Documents associated with this article

CESR final advice on UCITS Management Company Passport.pdf

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