On 3 July 2012, the European Commission published a ‘Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions, better known as ‘UCITS V’. The main object of the draft directive is to clarify and to harmonise the level of investor protection in the EU through the alignment of tasks and responsibilities that are expected from the depositaries of UCITS.
ALFI welcomes the general thrust of the proposed text. The 2008 financial crisis has indeed caused losses of assets in various instances and at various levels, sometimes due to insolvency or fraud, with a number of investment funds going out of business. This has increased expectations for investor protection. A harmonised European regulatory framework for depositaries’ duties and liabilities is indeed likely to further enhance investor protection. An optimum and uniform standard of investor protection across European Member States in turn is extremely important for European UCITS funds to remain a success story for EU retail investors. It is equally important for the continued success of exports of the European UCITS brand to other countries around the world.
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