European Commission publishes Implementing Directive on UCITS Eligible Assets
20/03/2007

Yesterday the European Commission published the final implementing Directive with regard to UCITS Eligible Assets. This Directive sets out  the criteria for assessing whether different types of financial instruments are eligible for investment by UCITS funds. These measures are aimed at removing uncertainty as to whether UCITS can properly invest in the following financial instruments: asset backed securities, listed closed-ended funds, Euro Commercial Paper, index based derivatives and credit derivatives. Member States now have 12 months to implement/transpose the Directive into their national laws. Simultaneously, CESR's Level III Guidelines on UCITS eligible assets have also issued. As the Level 2 recommendations have been, for the most part, included in the implementing Directive, the Level 3 Guidelines cover aspects in respect of which it is thought legislation is not required.

European Commission's  Implementing Directive on UCITS Eligible Assets

CESR's Level III Guidelines

In addition, the European Commission have also issued an Interpretative Communication clarifying relevant rules with respect to the cross-border marketing of UCITS . In particular, the Commission have reaffirmed that an investment fund's home supervisory authority has sole responsibility for monitoring compliance with EU rules and that the notification procedure cannot be used by Member States to challenge authorisation of UCITS granted in another Member State. 

European Commission's Interpretative Communication on Cross-border Marketing of UCITS