Chapter 7: 1.5 Flashcards
What are Undertakings for Collective Investments in Transferable Securities (UCITS)?
Series of EU regulations designed to facilitate the promotion of funds to retail investors across the EU and European Economic Area (EEA).
What does a UCITS fund comply with?
The requirements of these directives, no matter which EU country it’s established in.
What’s the aim of the directives?
Create a framework for cross-border sales of investment funds throughout the EU.
What was the rationale behind allowing funds to be sold cross-border?
- Would reduce costs involved
- Improve customer choice
What have UK Fund Management firms lost their ability to do post-Brexit?
Establish a fund in the UK as a UCITS fund and sell the fund across Europe.
What have fund management groups done in response to Brexit?
Set-up subsidiaries in Luxembourg and Ireland so they can operate across Europe from there.
What difficulty will EEA-based funds face due to Brexit?
Difficulties in selling their funds in the UK.
What does the FCA intend to permit?
Permit EEA UCITS funds to be marketed to retail investors for a temporary period before requiring them to apply for recognition.
What is the issue with FCA’s idea?
Sheer number of funds involved make individual recognition of funds impractical.
What is H.M. Treasury doing to make the FCA’s idea feasible?
Introducing an overseas fund regime to allow the government to recognise another country’s regime for funds, enabling funds from those countries to access the UK market.
What does NURS stand for?
Non-UCITS Retail Scheme
FWhat are NURS funds?
Funds that are deemed by UK regulators as suitable for retail investors, but don’t meet the rules of the European UCITS directives.
What do NURS allow?
- Greater range of investment opportunities, including direct investment in property.
- Use of a wider range of underlying instruments.
