UCITS stands for Undertakings for Collective Investment in Transferable Securities. The concept originally derived from the European Directive 85/611/EC, replaced by European Directive 2009/65/EC, which provides a single regulatory regime across the European Union for open-ended funds investing in transferable securities such as shares and bonds. With a view to defining the highest levels of investor protection, the Directive regulates the organisation, management and oversight of such funds, and imposes rules concerning diversification, liquidity and use of leverage. It was implemented into national law by Part 1 of the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment.
- Related EU acts (Level 2 regulations and directives)
- Luxembourg laws and regulations
- Circulars published by the national supervisory authority CSSF
- Trilingual list of technical terms
In Luxembourg, a UCITS may take three different legal forms:
UCITS can be set up as a single fund or as an umbrella fund consisting of multiple compartments, each with a different investment policy. The fund and compartments respectively may have an unlimited number of share classes, depending on the needs of the investors. Under certain conditions, cross-investments between sub-funds are allowed.