UCITS IV – Towards the next instalment

The transposition of Directive 2009/65/EC of 13th July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS IV Directive) shall be transposed by Malta as of 1 July 2011. It is expected, pursuant to extensive consultations, that the Maltese regulatory authority, the Malta Financial Services Authority (MFSA) shall implement most of the European Consultations by means of amendments to its Investment Services Rules.

The main drivers towards reform to the current UCITS III regime have been summarised as the following:

• Simplified Passporting for UCITS fund
  The implementation of a “single passport” regime shall simplify the Passporting process, slashing down the notification procedure from 2 months to a maximum of just 10 working days;

• Introduction of a full EU passport for UCITS managers
  Under the current UCITS III directive, the UCITS manager had to be licensed in the same domicile of the UCITS fund. This requirement shall now be removed, allowing UCITS managers full passporting rights, under the freedom of services and establishment to manage funds in any EU member state. This shall allow UCITS managers to benefit from economies of scale and increase the need to forum shop for the best domicile of choice – a factor that, given Malta’s optimum tax efficiency afforded to fund managers (ultimate tax leakage of 5% or less) should swing the balance decisively in favour of Malta as a domicile of choice.

• Master Feeder Structures
  UCITS IV shall allow the creation of Feeder UCITS Funds investing between 85% to 100% of its assets in units in a Master UCITS Fund, thereby maximising greater asset pooling

• Cross-Border Mergers
  Harmonisation rules shall be harmonised, thereby greatly facilitating the merger of UCITS Funds licensed in different jurisdictions.

• Key Investor Information Document
  The Simplified Propectus is being retired and replaced by an investor friendly standardised fund fact sheet, with the standardisation of and non-technical wording, aimed at affording investors greater protection.

A full (12) month transitional period for the replacement of the simplified directive with the Key Investor Information Document shall be allowed. Read in full about Malta UCITS