Ucits brand: to split or not to split

Flower petalsUcits should not be split into different categories, the European Fund and Asset Management Association (Efama) said this week, even though pressure from Asia is intensifying.

Claude Kremer, the association’s president, warned that any possible issues with the investment policy of Ucits should be carefully analysed and addressed in the Ucits VI review.

“We want to avoid that the Ucits brand is divided into several different categories,” Kremer said. “We think this would be very damaging for the brand as a whole.”

Asia now accounts for about one third of Ucits fund sales worldwide, although the degree of acceptance varies from country to country.

While Ucits funds are widely used in Hong Kong, for example, they have been less of a success in Singapore.

Sally Wong, chief executive officer at the Hong Kong Investment Funds Association, has repeatedly called for a system where Ucits funds are labelled as complex or non-complex.

“There are more and more questions to be asked as to what Ucits represents and how to position alternative Ucits for retail investors,” she said.

Even though Ucits IV has not been fully embraced by all countries, the European Commission has started consulting on Ucits VI.

The latest directive is likely to focus on eligible assets and the use of derivatives, efficient portfolio management techniques, liquidity management, over-the-counter derivatives and other pending issues from the Ucits IV directive.

Other issues to be addressed include the depository passport, money market funds and the alignment with the Alternative Investment Fund Managers Directive.

Kremer said Efama was working with different policymakers on “at least 30 different pieces of regulation”.

Efama’s overall aim was, he added, to “level the playing field for their originators and distributors of retail investment products”.

©2012 funds europe