Investor protection and regulation

Investors in UCITS funds benefit from compulsory diversification of assets, as well as the assurance that the fund's assets are held for safekeeping by an independent custodian bank, not the company that manages the fund. That means that if the fund management company becomes bankrupt, the assets belong to the fund's investors and cannot be seized to pay the company's creditors. Managers and providers of other services to UCITS funds must be licensed by their home financial regulator, in Luxembourg's case the Financial Sector Supervisory Authority (CSSF).