UCITS V - Focus on investor protection



Focus on investor protection


The financial crisis highlighted divergent depositary regimes across the EU and focussed regulators on remuneration and behaviour in the financial sector.

Reflecting these concerns, UCITS V has three key aims:

  1. To harmonise the UCITS depositary regime clarifying duties and liability (in line with AIFMD)
  2. To harmonise remuneration rules across the financial sectors (and in particular with AIFMD)
  3. To harmonise the treatment of sanctions for UCITS breaches

On 3 July 2013 the European Parliament adopted its position on UCITS V, rejecting a controversial bonus cap.

Given that the European Parliament ultimately rejected some of the more controversial elements, agreement between the EU institutions could be easier to reach. The Lithuanian EU Presidency restarted negotiations in Autumn 2013. Implementation is likely in Quarter 4 2015/Quarter 1 2016.

Overview UCITS V

EU Presidency text paves way for UCITS V

A compromise text on UCITS V, agreed by the EU’s Council of Ministers on 4 December 2013, means that negotiations with the European Parliament can now commence with a view to adopting the Directive in early 2014. UCITS V had not featured as an EU Presidency priority since it was proposed by the European Commission in July 2012 but now looks likely to be adopted in advance of the European elections in May 2014. This means that that the new UCITS rules on the depositary, remuneration and sanctions would take effect in 2016. 

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