prop · GD03153 · 1989-12-31 00:00:00 — A unit trust shall beauthorized only if the competent authorities have approved the managementcompany, the fund rules and the choice of depositary. An investment companyshall be authorized only if the competent authorities have approved both ilsinstruments of incorporation and the choice of depositary. The competent authorities maynol aulhorize a UCITS if the direc-lors of the management company, of theinvestment company or of the deposily are not of sufficienlly good repule orlack the experience required for the performance of their duties. To that end,the names ofthe direclors of the management company, of the investment companyand of the depositary and of every person succeeding them in office must becommunicated forlhwilh to the competent authorities. 'Direclors'shall mean those persons who, under the law or Ihe instruments ofincorporation, represenl the management company, the investment company or thedepositary, or who effectively determine the policy ofthe management company,the investment company or the depositary. Neitherthe management company nor the depositary may be re placed, nor may the fund rules or the investment company's instruments of incorporation be amended, without the approval of the competent authorities. SECTIONIII Obligations regarding the structure of unit tmsts Amanagement company must have sufficient financial resources at ils disposal toenable it lo conduct ils business effectively and meet its liabili-lies. Nomanagement company may engage in activities other than the management of unitIrusts and of investment companies. Aunit trusfs assets must be enlmsled to a depositary for safe-keeping. Adepositary's liabilily as referred lo in Article 9 shall nol be affected 156 by the fact that it hasenlmsled to a third party all or some ofthe assets in Prop. 1989/90:153 its safe-keeping. 3.A depositary must, moreover: (a) ensure that the sale, issue, re-purchase,redemption and cancellation of units effected on behalf of a unit tmsl or by amanagement company are carried out in accordance with the law and the fundmles; (b)ensure that the value of unitsis calculated in accordance with the law and the fund mles; (c) carry out the instmctions ofthe management company, unless they conflict with the law or the fund mles; (d) ensurethat in transaclions involving a unit lmsl's assets any consid eration is remitted lo it within the usual lime limils; (e) ensurethat a unit lmst's income is applied in accordance with the law and the fund mles. Adepositary must either have ils registered office in the same as that ofthe management company or be established in that if ils registered office is in another . A depositary must be aninstitution which is subject to public control. It must also furnishsufficient financial and professional guarantees to be able effectively lopursue ils business as depositary and meet the commitmenls inherent in thatfunction. The Member States shalldetermine which ofthe catégories of institutions referred to in paragraph 2shall be eligible lo be depositaries. Adepositary shall, in accordance with the national law of the State in which themanagement company's registered office is situated, be liable lo the managementcompany and the unil-holders for any loss suffered by them as a result of itsunjuslifiable failure to perform its obligations or its improper performance ofthem. Liabilily to unit-holders may be invoked either directly or indirectlythrough the management company, depending on the legal nature oftherelationship between the depositary, the management company and theunil-holders. Nosingle company shall act as both management company and deposi tary. Inthe context of their respective roles the management company and the depositary must act independently and solely in the interest ofthe unil- holders. Thelaw or the fund mles shall lay down the conditions for the replacement rJiiaga o of the management company and the depositary and rules lo ensure theprotection of unil-holders in the event of such replacement. Obligationsregarding the structure of investment companies and their depositaries TheMember States shall determine the legal form which an investment company mustlake. Il must have sufficient paid-up capilal to enable il ol conduct ilsbusiness effectively and meet ils liabililies. Noinvestment company may engage in activities olher than those referred to inArticle I (2). Aninvestment company's assets must be enlmsled lo a depositary for safe-keeping. A depositary's liabilily asreferred to in Article 16 shall not be affected by the fact that il hasentrusled to a third party all or some ofthe assets in its safe-keeping. A depositary must, moreover: (a)ensure that the sale, issue,re-purchase, redemption and cancellation of un its effected by or on behalf ofa company are carried out in accordance with the law and with the company'sinstruments of incorporation; (b)ensure that in transaclionsinvolving a company's assets any consideration is remitted to it within theusual time limils; (c)ensure that a company's incomeis applied in accordance with the law and its instruments of incorporation. may decide that investment companies situated within its territory which märket their units exclusively through one or more stock exchanges on which their units are admitted to official listing shall not be required to have depositaries within the meaning of this Directive. Artides34, 37 and 38 shall not apply to such companies. However, the rules for thevaluation of such companies' assets must be stated in law or in theirinstruments of incorporation. may decide that investment companies situated within its territory which märket at least of their-units through one or more stock exchanges designated in their instruments of incorporation shall not be required tohave depositaries within the meaning of this 158 Directiveprovided that their units are admitted to official Usling on the Prop.1989/90:153 stockexchanges of those Member States within ihe territories of which the Bilaga6 unitsare marketed, and that any transaclions which such a company may effect outwith stockexchanges are effected at stock exchange prices only. company'sinstruments of incorporation must specify the stock exchange inthe country of marketing the prices on which shall determine the prices at which that company willeffect any transaclions outwith stock exchanges avail itself of the option provided for in the precedingsubparagraph only if it considers that unit-holders have protection equivalentlo that of unil-holders in UCITS which have depositaries within the meaning ofthis Direclive. Inparticular, such companies and the companies referred to in paragraph 4, must: (a) in the absence of provision inlaw, state in their instmments of incorporation the methods of calculationofthe net assel values of their units; (b)inlervene on the märket loprevent the stock exchange values of their units from deviating by more than from their net asset values; (c) establish the net asset valuesof their units, communicate them to the competent authorities at least twice aweek and publish them twice a month. Alleast twice a month, an independent audilor must ensure that the calculationofthe value of units is effected in accordance with the law and the company'sinstruments of incorporation. On such occasions, the audilor must make surethat the company's assets are invested in accordance with the rules laid downby law and the company's instruments of incorporation. 6.The Member States shall inform the Commission ofthe identilies of the companiesbenefiting from the derogalions provided for in paragraphs 4 and 5. TheCommission shall report to application ofparagraphs 4 and 5 within five years ofthe implementation of this Directive.After obtaining the Contact Commillee's opinion, the Commission shall, if needbe, propose appropriate measures. Adepositary must either have its registered office in the same as that ofthe investment company or be established in that if its registered office is in another . A depositary must be aninstitution which is subject to public control. Il must also furnishsufficient financial and professional guarantees lo be able effectively topursue its business as depositary and meet the commitmenls inherent in thatfunction. The Member States shalldetermine which ofthe catégories of institutions referred lo in paragraph 2shall be eligible lo be depositaries. Adepositary shall, in accordance with the national law of the State in rJHgäo which the investment company's registered office is situated, be liable tothe investment company and the unit-holders for any loss suffered by them as aresult of its unjuslifiable failure lo perform its obligations, or its improperperformance of them. Nosingle company shall act as both investment company and depos itary. Incarrying out its role as depositary, the depositary must act solely in the inlerests ofthe unit-holders. Thelaw or the investment company's instruments of incorporation shall lay down theconditions for the replacement ofthe depositary and mles to ensure theprotection of unil-holders in the event of such replacement. Obligationsconcerning the investment policies of UCITS 1.The inveslments of a unit trust or of an investment company must consist solelyof: (a) transferable securitiesadmitted to official listing on a stock exchange in a and/or; (b)transferable securities dealtin on another regulated märket in a which operates regulariy andis recognized and open to the public and/or; (c) Iransferable securitiesadmitted to official listing on a stock exchange in a non-member State or dealtin on another regulated märket in a non-member State which operates regulariyand is recognized and open lo the public provided that the choice of stockexchange or märket has been approved by the competent authorities or isprovided for in law or the fund rules or the investment company's instmments ofincorporation and/or; (d) recentlyissued Iransferable securities, provided that: the terms of issue include an undertaking that application will be made for admission to official listing on a stock exchange or to another regulated märket which operates regulariy and is recognized and open to the public, provided that the choice of stock exchange or märket has been approved by the competent authorities or is provided for in law or the fund rules or the investment company's instruments of incorpora tion; 160 such admission is secured within a year of issue. 2.However: Bilaga 6 (a) a UCITS may invest no more than10% of ils assets in transferable securities olher than those referred lo inparagraph I; (b)a may provide thata UCITS may invesi no more than IO % of its assets in debi instruments which,for purposes of this Direclive, shall be treated, because of theircharacteristics, as equivalent to transferable securities and which are, interalia, Iransferable, liquid and have a value which can be accurately determinedat any time örat least with the frequency stipulaled in Article 34; (c) an investment company mayacquire movable and immovable property which is essential for the directpursuil ofils business; (d) aUCITS may not acquire either precious melals or certificates representinglhem. The total of the inveslmentsreferred to in paragraph 2 (a) and (b) may nol under any circumstances amounllo more than ofthe assets of a UCITS. Unit Irusts and investmentcompanies may hold ancillary liquid assets. TheMember Slates shall send lo the Commission: (a) no låter than date ofimplementation of this Direclive, lists of the debi instruments which, inaccordance with Article 19 (2) (b), they plan lo treat as equivalent totransferable securities, stating the characteristics of those instruments andthe reasons for so doing; (b) details of any amendments whichthey contemplate making to the lists of instruments referred to in (a) or anyfurhler instruments which they contemplate treating as equivalent toIransferable securities, together with their reasons for so doing. TheCommission shall immediately forward that information to the other Member States together with any comments which it considers appropriate. may be the subject of exchanges of views within in accordance with the procedure laid down in Article 53 (4). TheMember States may aulhorize UCITS lo employ techniques and instmments relating lo transferable securities under the conditions and within the limits which they lay down provided that such techniques and instmments are used for the purpose of efficient portfolio management. TheMember States may also aulhorize UCITS to employ techniques and instruments intended to provide protection against exchange risks in the context of themanagement of their assets and liabililies. 11 1989/90. I sami Nr 153 A UCITS may invest no more than5% of ils assets in Iransferable bilaga o securities issued by the samebody. The Member Slates may raise thelimit laid down in paragraph I lo a maximum of . However, ihelolal value ofthetransferable securities held by a UCITS in the issuing bodies in each of whichil invests more than of its assets must not then exceed ofthe valueofils assets. The Member States may raise thelimit laid down in paragraph I lo a maximum of if the Iransferablesecurities are issued or guaranteed by a , by its localauthorities, by a non-member State or by public intemational bodies of whichone or more Member States are members. Byway of dérogation from Article 22 and without préjudice lo Article 68 (3) ofthe Treaty, the Member Slates may aulhorize UCITS to invest in accordance with the principle of risk-spreading up to of their assets in different transferable securities issued or guaranteed by any , its local authorities, a non-member State or public intemational bodies of which one or more Member States are members. Thecompetent authorities shall grant such a dérogation only if they consider thatunit-holders in the UCITS have protection equivalent to that of unil-holders inUCITS complying with the limils laid down in Article 22. Sucha UCITS must hold securities from al least six different issues, but securitiesfrom any one issue may not account for more than of its total assets. The UCITS referred to inparagraph 1 must make express mention in the fund rules or in the investmentcompany's instruments of incorporation of the States, local authorities orpublic intemational bodies issuing or guaranteeing securities which they intendto invesi more than of their assets; such fund rules or instruments ofincorporation must be approved by the competent authorities. In addition each such UCITSreferred to in paragraph 1 must include a prominent statement in ils prospeclusand any promolional literature drawing attention to such authorization andindicating the Slates, local authorities and/or public intemational bodies inthe securities of which it intends to invest or has invested more than ofits assets. 1.A UCITS may nol acquire the units of other collective investment undertakings ofthe open-ended type unless they are collective investment undertakings within the meaning ofthe first and second indenls of Article 1 (2). A UCITS may invesi no more than5% of ils assets in the units of Prop. 1989/90:153 such collectiveinvestment undertakings. Investment in the units of aunit trust managed by the same management company or by any olher company withwhich the management company is linked by common management or control, or by asubstantial direct or indirecl holding, shall be permitted only in the case ofa trust which, in accordance with its rules, has specialized in investment in aspecific geographical area or economic sector, and provided that such investmentis authorized by the competent authorities. Authorization shall be granted onlyif the trust has announced ils intention of making use of that option and thatoption has been expressly stated in its rules. Amanagement company may not charge any fees or costs on account of transaclionsrelating to a unit trust's units where some of a unit trusl's assets areinvested in the units of another unit trust managed by the same managementcompany or by any olher company with which the management company is linked bycommon management or control, or by a substantial direct or indirecl holding. Paragraph3 shall also apply where an investment company acquires units in another investment company lo which it is linked within the meaning of paragraph 3. Paragraph3 shall also apply where an investment company acquires units of a unit trustlo which it is linked, or where a unit tmsl acquires units of an investmentcompany lo which il is linked. Aninvestment company or a management company acling in connec tion with all ofthe unit Irusts which it manages and which fall within the scope of this Direclive may nol acquire any shares carrying voting rights which would enable il lo exercise significanl influence over the management of an issuing body. Pendingfurther coordination, the Member States shall lake account of existing rulesdefining the principle stated in the first subparagraph under other MemberState's legislation. Morever,an investment company or unit trust may acquire no more than: 10%ofthe non-voling shares of any single issuing body; 10%ofthe debi securities of any single issuing body; 10%of the units of any single collective investment undertaking within the meaningofthe first and second indenls of Article I (2). Thelimits laid down in the second and third indenls may be disregarded al the debisecurities or the net amounl ofthe securities in issue cannot be calculated. may waive application of paragraphs 1 and 2 as regards; (a) transferable securities issuedor guaranteed by a or its local authorities; (b) transferable securities issuedor guaranteed by a non-member State; 163 (c) transferablesecurities issued by public intemational bodies of which Prop. 1989/90:153 one or more Member Slates are members; Bilaga 6 (d) sharesheld by a UCITS in the capilal of a company incorporated in a non-member State invesling its assets mainly in the securities of issuing bodies having their registered offices in that State such a holding repre- senls the only way in which the UCITS can invest in the securities of issuing bodies of that State. This dérogation, however, shall apply only if in its investment policy the company from the non-member State com- plies with the liiis laid down in Artides 22, 24 and 25 (I) and (2). Where the limils sel in Artides 22 and 24 are exceeded. Article 26 shall apply mutatis mutandis; (e) sharesheld by an investment company in the capital of subsidiary companies carrying on the business of management, advice or marketing exclusively on ils behalf UCITSneed not comply with the limils laid down in this Section when exercising subscription rights allaching to Iransferable securities which form part of their assets. Whileensuring observance ofthe principle of risk-spreading, the Member States mayallow recently authorized UCITS lo derogale from Artides 22 and 23 for sixmonths following the date of their authorization. Ifthe limils referred to in paragraph 1 are exceeded for reasons beyond the control of a UCITS or as a result ofthe exercise of subscription rights, that UCITS must adopt as a priority objeclive for ils sales transac lions the remedyingof that situation, takind due account ofthe interests of its unit-holders. SECTIONVI Obligations concerning information to be suppliedto unit-holders A.Publication of a prospeclus and periodical reports Aninvestment company and, for each of the tmsts il manages, a management company must publish: anannual report for each financial year, and ahalf-yearly report covering the first six months ofthe financial year. Theannual and half-yearly reports must be published within the foUwing lime limits, with effect from the ends ofthe periods lo which they reläte: fourmonths in the case ofthe annual report, twomonths in the case ofthe half-yearly report. Article 28 Prop. Aprospeclus must include the information necessary for investors to ''ilägao be able lo make an informed judgement of the in vestment proposed to them. Itshall contain at least the information provided for in Schedule A annexed tothis Directive, insofar as that information does nol already appear in thedocuments annexed lo the prospeclus in accordance with Article 29 (1). The annual report must includea balance-sheet or a statement of assets and liabililies, a detailed income andexpendilure account for the financial year, a report on the activities ofthefinancial year and the other information provided for in Schedule B annexed lothis Directive, as well as any significanl information which will enableinvestors to make an informed judgement on the development of the activities ofthe UCITS and its results. The half-yearly report mustinclude al least the information provided for in Chaplers I lo IV ofSchedule B annexed to this Directive; where a UCITS has paid or proposes lo payan interim dividend, the figures must indicate the results after tax for thehalf-year concerned and the interim dividend paid or proposed. The fund rules or an investmentcompany's instruments of incorporation shall form an integral part oftheprospeclus and must be annexed thereto. The documents referred lo inparagraph I need nol, however, be annexed to the prospeclus provided that theunit-holder is informed that on request he or she will be sent those documentsor be apprised of the place where, in each in which the units areplaced on the märket, he or she may consult them. Article30 The essential elements ofthe prospeclus must be kept up to date. Theaccounting information given in the annual report must be audited by one ormore persons empowered by law to audit accounts in accordance with CouncilDireclive 84/253/EEC of based on Artide 54 (3) (g) of the EECTreaty on the approval of persons responsible for carrying out the statutoryaudits of accounting documents.' The audilor's report, including anyqualificalions, shall be reproduced in full in the annual report. 'OJ No L 126, , p.20. 12 1989/90. 1 sami Nr 153 AUCITS must send its prospeclus and any amendments thereto, as well Bilaga oas its annual and half-yearly reports, to the competent authorities. The prospeclus, the latestannual report and any subsequent half-yearly report published must be offeredto subscribers free of charge before the conclusion of a contract. In addition, the annual andhalf-yeariy reports must be available lo the public at the placés specified inthe prospeclus. The annual and half-yeariyreports shall be supplied to unit-holders free of charge on request. B.Publication of olher information Article34 A UCITS must make public in an appropriate the issue, sale,repurchase or redemption price of its units each time it issues, sells,repur-chases or redeems them, and at least twice a month. The competent authoritiesmay, however, permit a UCITS to reduce the frequency to once a month oncondition that such a dérogation does nol préjudice the inlerests oftheunit-holders. Allpublicity comprising an invitation to purchase the units of a UCITS mustindicate that a prospeclus exists and the placés where it may be obtained bythe public. SECTIONVII The general obligations of UCITS aninvestment company, nor amanagement company or depositary acting on behalf of a unit trust, may borrow. However,a UCTIS may acquire foreign currency by means of a 'back-to-back' loan. Byway of dérogation from paragraph I, a may aulho rize a UCITS to borrow: (a) uppto ofits assets, in the case of an investment company, or ofthevalue ofthe fund, in the case of a unit trust, provided that the borrowing ison a temporary basis; (b) uplo of its assets, in the case of an investment company, 166