New consultations on UCITS
The latest European Commission’s consultation paper on product rules, liquidity management, depositary, money market funds and long-term investments, referred to as UCITS VI, demonstrates the on-going regulatory scrutiny and is paving the way for further improvements of the UCITS framework.
First steps toward UCITS VI
The thematically wide-ranging UCITS VI consultations question a review of eligible assets for UCITS and put in particular money market funds under further scrutiny.
Recent findings and international discussions on shadow banking in mind, the Commission explores feasible policy options for the use of securities lending, repo’s and OTC derivatives within the UCITS product.
Furthermore, the EC is gathering feedback on the available toolkit to manage liquidity bottleneck under exceptional circumstances required by some UCITS during crisis related market turmoil’s, and on a few suggested rectifications of UCITS IV framework.
The UCITS VI consultation paper also seeks industry and regulator feedback on two more conceptional topics: The introduction of a European passport for depositary banks and on measures to foster long-term investments for retails investors.
Striving to keep pace with the international regulatory agenda, the level of granularity at which the Commission is seeking industry feedback, evidence and guidance across the different topics for UCITS VI suggests that impacts for the different stakeholders of any proposed changes are carefully considered.