1985L0611 — EN — 13.02.2002 — 004.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL DIRECTIVE
of 20December 1985
on the coordination of laws, regulations and administrative provisions relating to undertakings for
collective investment in transferable securities (UCITS)
(85/611/EEC)
(OJ L 375, 31.12.1985, p. 3)
Amended by:
Official Journal
No page date
►M1Council Directive 88/220/EEC of22 March 1988 L 100 31 19.4.1988
►M2European Parliament and Council Directive 95/26/EC of29 June 1995 L 168 7 18.7.1995
►M3Directive 2000/64/EC ofthe European Parliament and ofthe Council of7
November 2000L 290 27 17.11.2000
►M4Directive 2001/107/EC ofthe European Parliament and ofthe Council of
21 January 2002L 41 20 13.2.2002
►M5Directive 2001/108/EC ofthe European Parliament and ofthe Council of
21 January 2002L 41 35 13.2.2002
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COUNCIL DIRECTIVE
of 20December 1985
on the coordination of laws, regulations and administrative
provisions relating to undertakings for collective investment in
transferable securities (UCITS)
(85/611/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 57 (2) thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion ofthe European Parliament (2),
Having regard to the opinion ofthe Economic and Social Committee (3),
Whereas the laws ofthe Member States relating to collective investment
undertakings differ appreciably from one state to another, particularly asregards the obligations and controls which are imposed on thoseundertakings; whereas those differences distort the conditions ofcompetition between those undertakings and do not ensure equivalent
protection for unit-holders;
Whereas national laws governing collective investment undertakings
should be coordinated with a view to approximating the conditions ofcompetition between those undertakings at Community level, while atthe same time ensuring more effective and more uniform protection forunit-holders; whereas such coordination will make it easier for acollective investment undertaking situated in one Member State to
market its units in other Member States;
Whereas the attainment ofthese objectives will f acilitate the removal of
the restrictions on the free circulation of the units of collectiveinvestment undertakings in the Community, and such coordination willhelp to bring about a European capital market;
Whereas, having regard to these objectives, it is desirable that common
basic rules be established for the authorization, supervision, structure
and activities ofcollective investment undertakings situated in the
Member States and the information they must publish;
Whereas the application of these common rules is a sufficient guarantee
to permit collective investment undertakings situated in Member States,subject to the applicable provisions relating to capital movements, tomarket their units in other Member States without those Member States'
being able to subject those undertakings or their units to any provision
whatsoever other than provisions which, in those states, do not fallwithin the field covered by this Directive; whereas, nevertheless, if acollective investment undertaking situated in one Member State marketsits units in a different Member State it must take all necessary steps toensure that unit-holders in that other Member State can exercise their
financial rights there with ease and are provided with the necessary
information,
Whereas the coordination ofthe laws ofthe Member States should be
confined initially to collective investment undertakings other than of theclosed-ended type which promote the sale oftheir units to the public inthe Community and the sole object ofwhich is investment in
transferable securities (which are essentially transferable securities
officially listed on stock exchanges or similar regulated markets);whereas regulation ofthe collective investment undertakings notcovered by the Directive poses a variety ofproblems which must bedealt with by means ofother provisions, and such undertakings willaccordingly be the subject ofcoordination at a later stage; whereas1985L0611 — EN — 13.02.2002 — 004.001 — 2
(1) OJ No C 171, 26. 7. 1976, p. 1.
(2) OJ No C 57, 7. 3. 1977, p. 31.
(3) OJ No C 75, 26. 3. 1977, p. 10.
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pendingsuchcoordinationanyMemberStatemay,interalia, prescribe
those categories of undertakings for collective investment in transferable
securities (UCITS) excluded from this Directive's scope on account of
their investment and borrowing policies and lay down those specific
rules to which such UCITS are subject in carrying on their businesswithin its territory;
Whereas the free marketing of the units issued by UCITS authorized to
invest up to 100 % oftheir assets in transf erable securities issued by thesame body (State, local authority, etc.) may not have the direct orindirect effect of disturbing the functioning of the capital market or the
financing of the Member States or of creating economic situations
similar to those which Article 68 (3) ofthe Treaty seeks to prevent;
Whereas account should be taken ofthe special situations ofthe
Hellenic Republic's and Portuguese Republic's financial markets byallowing those countries and additional period in which to implementthis Directive,
HAS ADOPTED THIS DIRECTIVE:
Section I
General provisions and scope
Article 1
1. The Member States shall apply this Directive to undertakings forcollective investment in transferable securities (hereinafter referred to asUCITS) situated within their territories.
2. For the purposes ofthis Directive, and subject to Article 2, UCITS
shall be undertakings:
— the sole object ofwhich is the collective investment in transf erable
securities and/or in other liquid financial assets referred to in Article
19(1) ofcapital raised f rom the public and which operates on theprinciple ofrisk-spreading and
— the units ofwhich are, at the request ofholders, re-purchased or
redeemed, directly or indirectly, out ofthose undertakings' assets.Action taken by a UCITS to ensure that the stock exchange value ofits units does not significantly vary from their net asset value shall beregarded as equivalent to such re-purchase or redemption.
3. Such undertakings may be constituted according to law, eitherunder the law ofcontract (as common f unds managed by management
companies) or trust law (as unit trusts) or under statute (as investment
companies).
For the purposes ofthis Directive ‘common f unds’ shall also include
unit trusts.
4. Investment companies the assets ofwhich are invested through the
intermediary ofsubsidiary companies mainly otherwise than intransferable securities shall not, however, be subject to this Directive.
5. The Member States shall prohibit UCITS which are subject to this
Directive from transforming themselves into collective investmentundertakings which are not covered by this Directive.
6. Subject to the provisions governing capital movements and to
Articles 44, 45 and 52 (2) no Member State may apply any other
provisions whatsoever in the field covered by this Directive to UCITS
situated in another Member State or to the units issued by such UCITS,where they market their units within its territory.
7. Without prejudice to paragraph 6, a Member State may apply to
UCITS situated within its territory requirements which are stricter thanor additional to those laid down in Article 4 et seq. ofthis Directive,
provided that they are ofgeneral application and do not conf lict with theprovisions ofthis Directive.1985L0611 — EN — 13.02.2002 — 004.001 — 3
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8. For the purposes ofthis Directive, ‘transf erable securities’ shall
mean:
— shares in companies and other securities equivalent to shares in
companies (‘shares’),
— bonds and other forms of securitised debt (‘debt securities’),
— any other negotiable securities which carry the right to acquire any
such transferable securities by subscription or exchange,
excluding the techniques and instruments referred to in Article 21.
9. For the purposes ofthis Directive ‘money market instruments’
shall mean instruments normally dealt in on the money market which are
liquid, and have a value which can be accurately determined at any time.
Article 1a
For the purposes ofthis Directive:
1. ‘depositary’ shall mean any institution entrusted with the duties
mentioned in Articles 7 and 14 and subject to the other provisionslaid down in Sections IIIa and IVa;
2. ‘management company’ shall mean any company, the regular
business ofwhich is the management ofUCITS in the f orm ofunittrusts/common funds and/or of investment companies (collective
portfolio management of UCITS); this includes the functions
mentioned in Annex II;
3. a ‘management company's home Member State’ shall mean the
Member State, in which the management company's registeredoffice is situated;
4. a ‘management company's host Member State’ shall mean the
Member State, other than the home Member State, within the
territory ofwhich a management company has a branch or provides
services;
5. a ‘UCITS home Member State’ shall mean:
(a) with regard to a UCITS constituted as unit trust/common fund,
the Member State in which the management company'sregistered office is situated,
(b) with regard to a UCITS constituted as investment company, the
Member State in which the investment company's registered
office is situated;
6. a ‘UCITS host Member State’ shall mean the Member State, other
than the UCITS home Member State, in which the units ofthecommon fund/unit trust or of the investment company are marketed;
7. ‘branch’ shall mean a place ofbusiness which is a part ofthe
management company, which has no legal personality and whichprovides the services for which the management company has been
authorised; all the places ofbusiness set up in the same Member
State by a management company with headquarters in anotherMember State shall be regarded as a single branch;
8. ‘competent authorities’ shall mean the authorities which each
Member State designates under Article 49 ofthis Directive;
9. ‘close links’ shall mean a situation as defined in Article 2(1) of
Directive 95/26/EC (
1);
10. ‘qualifying holdings’ shall mean any direct or indirect holding in a
management company which represents 10 % or more ofthe capitalor ofthe voting rights or which makes it possible to exercise asignificant influence over the management of the managementcompany in which that holding subsists.1985L0611 — EN — 13.02.2002 — 004.001 — 4
(1) OJ L 168, 18.7.1995, p. 7.▼M4
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For the purpose of this definition, the voting rights referred to in
Article 7 ofDirective 88/627/EEC (1) shall be taken into account;
11. ‘ISD’ shall mean Council Directive 93/22/EEC of10 May 1993 on
investment services in the securities field (2);
12. ‘parent undertaking’ shall mean a parent undertaking as defined in
Articles 1 and 2 ofDirective 83/349/EEC (3);
13. ‘subsidiary’ shall mean a subsidiary undertaking as defined in
Articles 1 and 2 ofDirective 83/349/EEC; any subsidiary ofa
subsidiary undertaking shall also be regarded as a subsidiary ofthe
parent undertaking which is the ultimate parent ofthose under-takings;
14. ‘initial capital’ shall mean capital as defined in items 1 and 2 of
Article 34(2) ofDirective 2000/12/EC(
4);
15. ‘own funds’ shall mean own funds as defined in Title V, Chapter 2,
Section 1 ofDirective 2000/12/EC; this def inition may, however, be
amended in the circumstances described in Annex V ofDirective
93/6/EEC (5).
Article 2
1. The following shall not be UCITS subject to this Directive:
— UCITS ofthe closed-ended type;
— UCITS which raise capital without promoting the sale oftheir units
to the public within the Community or any part ofit;
— UCITS the units ofwhich, under the f und rules or the investment
company's instruments ofincorporation, may be sold only to thepublic in non-member countries;
— categories ofUCITS prescribed by the regulations ofthe Member
States in which such UCITS are situated, for which the rules laid
down in Section V and Article 36 are inappropriate in view oftheir
investment and borrowing policies.
2. Five years after the implementation of this Directive the
Commission shall submit to the Council a report on the implementationofparagraph 1 and, in particular, ofits f ourth indent. Ifnecessary, itshall propose suitable measures to extend the scope.
Article 3
For the purposes ofthis Directive, a UCITS shall be deemed to be
situated in the Member State in which the investment company or themanagement company of the unit trust has its registered office; theMember States must require that the head office be situated in the sameMember State as the registered office.
SECTION II
Authorization of UCITS
Article 4
1. No UCITS shall carry on activities as such unless it has been
authorized by the competent authorities ofthe Member State in which itis situated, hereinafter referred to as ‘the competent authorities’.
Such authorization shall be valid for all Member States.1985L0611 — EN — 13.02.2002 — 004.001 — 5
(1) OJ L 348, 17.12.1988, p. 62.
(2) OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2000/64/
EC (OJ L 290, 17.11.2000, p. 27).
(3) OJ L 193, 18.7.1983, p. 1. Directive as last amended by the 1994 Act of
Accession.
(4) OJ L 126, 26.5.2000, p. 1. Directive as amended by Directive 2000/28/EC of
the European Parliament and ofthe Council (OJ L 275, 27.10.2000, p. 37).
(5) OJ L 141, 11.6.1993, p. 1. Directive as last amended by Directive 98/33/EC
ofthe European Parliament and ofthe Council (OJ L 204, 21.7.1998, p. 29).▼B
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2. A unit trust shall be authorized only ifthe competent authorities
have approved the management company, the fund rules and the choiceofdepositary. An investment company shall be authorized only ifthe
competent authorities have approved both its instruments ofincorpora-
tion and the choice ofdepositary.
3. The competent authorities may not authorise a UCITS ifthe
management company or the investment company do not comply with
the preconditions laid down in this Directive, in Sections III and IVrespectively.
Moreover the competent authorities may not authorise a UCITS ifthe
directors ofthe depositary are not ofsuf f iciently good repute or are notsufficiently experienced also in relation to the type of UCITS to bemanaged. To that end, the names ofthe directors ofthe depositary andof every person succeeding them in office must be communicated
forthwith to the competent authorities.
Directors shall mean those persons who, under the law or the
instruments ofincorporation, represent the depositary, or who
effectively determine the policy of the depositary.
3a. The competent authorities shall not grant authorisation ifthe
UCITS is legally prevented (e.g. through a provision in the fund rules or
instruments ofincorporation) f rom marketing its units or shares in its
home Member State.
4. Neither the management company nor the depositary may be
replaced, nor may the fund rules or the investment company's
instruments ofincorporation be amended, without the approval ofthecompetent authorities.
SECTION III
Obligations regarding management companies
Title A
Conditions for taking up business
Article 5
1. Access to the business ofmanagement companies is subject to
prior official authorisation to be granted by the home Member State'scompetent authorities. Authorisation granted under this Directive to amanagement company shall be valid for all Member States.
2. No management company may engage in activities other than the
management ofUCITS authorised according to this Directive except theadditional management ofother collective investment undertakingswhich are not covered by this Directive and for which the management
company is subject to prudential supervision but which cannot be
marketed in other Member States under this Directive.
The activity ofmanagement ofunit trusts/common f unds and of
investment companies includes, for the purpose of this Directive, the
functions mentioned in Annex II which are not exhaustive.
3. By way ofderogation f rom paragraph 2, Member States may
authorise management companies to provide, in addition to the
management ofunit trusts/common f unds and ofinvestment companies,the following services:
(a) management ofportf olios ofinvestments, including those owned by
pension funds, in accordance with mandates given by investors on adiscretionary, client-by-client basis, where such portfolios includeone or more ofthe instruments listed in Section B ofthe Annex tothe ISD,1985L0611 — EN — 13.02.2002 — 004.001 — 6
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(b) as non-core services:
— investment advice concerning one or more ofthe instruments
listed in Section B ofthe Annex to the ISD,
— safekeeping and administration in relation to units of collective
investment undertakings.
Management companies may in no case be authorised under this
Directive to provide only the services mentioned in this paragraph or toprovide non-core services without being authorised for the servicereferred to in point (a).
4. Article 2(4), Article 8(2), Articles 10, 11 and 13 ofthe ISD shall
apply to the provision ofthe services mentioned in paragraph 3 ofthisArticle by management companies.
Article 5a
1. Without prejudice to other conditions ofgeneral application laid
down by national law, the competent authorities shall not grantauthorisation to a management company unless:
(a) the management company has an initial capital ofat least
EUR 125 000:
— When the value ofthe portf olios ofthe management company,
exceeds EUR 250 000 000, the management company shall berequired to provide an additional amount ofown f unds. Thisadditional amount ofown f unds shall be equal to 0,02 % oftheamount by which the value ofthe portf olios ofthe managementcompany exceeds EUR 250 000 000. The required total ofthe
initial capital and the additional amount shall not, however,
exceed EUR 10 000 000.
— For the purpose of this paragraph, the following portfolios shall
be deemed to be the portfolios of the management company:
(i) unit trusts/common funds managed by the management
company including portfolios for which it has delegated themanagement function but excluding portfolios that it ismanaging under delegation;
(ii) investment companies for which the management company
is the designated management company;
(iii) other collective investment undertakings managed by the
management company including portfolios for which it hasdelegated the management function but excluding portfolios
that it is managing under delegation.
— Irrespective ofthe amount ofthese requirements, the own f unds
ofthe management company shall never be less than the amountprescribed in Annex IV ofDirective 93/6/EEC.
— Member States may authorise management companies not to
provide up to 50 % ofthe additional amount ofown f unds
referred to in the first indent if they benefit from a guarantee of
the same amount given by a credit institution or an insuranceundertaking. The credit institution or insurance undertaking musthave its registered office in a Member State, or in a non-MemberState provided that it is subject to prudential rules considered by
the competent authorities as equivalent to those laid down in
Community law.
— No later than 13 February 2005, the Commission shall present a
report to the European Parliament and the Council on theapplication ofthis capital requirement, accompanied whereappropriate by proposals for its revision;
(b) the persons who effectively conduct the business of a management
company are of sufficiently good repute and are sufficiently
experienced also in relation to the type ofUCITS managed by the
management company. To that end, the names ofthese persons andof every person succeeding them in office must be communicatedforthwith to the competent authorities. The conduct of a manage-ment company's business must be decided by at least two personsmeeting such conditions;1985L0611 — EN — 13.02.2002 — 004.001 — 7
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(c) the application for authorisation is accompanied by a programme of
activity setting out, inter alia , the organisational structure ofhe
management company;
(d) both its head office and its registered office are located in the same
Member State.
2. Moreover where close links exist between the management
company and other natural or legal persons, the competent authoritiesshall grant authorisation only if those do not prevent the effective
exercise oftheir supervisory f unctions.
The competent authorities shall also refuse authorisation if the laws,
regulations or administrative provisions ofa non-member countrygoverning one or more natural or legal persons with which the
management company has close links, or difficulties involved in their
enforcement, prevent the effective exercise of their supervisoryfunctions.
The competent authorities shall require management companies to
provide them with the information they require to monitor compliance
with the conditions referred to in this paragraph on a continuous basis.
3. An applicant shall be informed, within six months of the
submission ofa complete application, whether or not authorisation has
been granted. Reasons shall be given whenever an authorisation is
refused.
4. A management company may start business as soon as authorisa-
tion has been granted.
5. The competent authorities may withdraw the authorisation issued
to a management company subject to this Directive only where thatcompany:
(a) does not make use ofthe authorisation within 12 months, expressly
renounces the authorisation or has ceased the activity covered bythis Directive more than six months previously unless the MemberState concerned has provided for authorisation to lapse in suchcases;
(b) has obtained the authorisation by making false statements or by any
other irregular means;
(c) no longer fulfils the conditions under which authorisation was
granted;
(d) no longer complies with Directive 93/6/EEC ifits authorisation also
covers the discretionary portfolio management service referred to in
Article 5(3)(a) ofthis Directive;
(e) has seriously and/or systematically infringed the provisions adopted
pursuant to this Directive; or
(f) falls within any of the cases where national law provides for
withdrawal.
Article 5b
1. The competent authorities shall not grant authorisation to take up
the business ofmanagement companies until they have been inf ormed ofthe identities ofthe shareholders or members, whether direct or indirect,natural or legal persons, that have qualifying holdings and of theamounts ofthose holdings.
The competent authorities shall refuse authorisation if, taking into
account the need to ensure the sound and prudent management ofamanagement company, they are not satisfied as to the suitability of theaforementioned shareholders or members.
2. In the case ofbranches ofmanagement companies that have
registered offices outside the European Union and are starting orcarrying on business, the Member States shall not apply provisions thatresult in treatment more favourable than that accorded to branches ofmanagement companies that have registered offices in Member States.1985L0611 — EN — 13.02.2002 — 004.001 — 8
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3. The competent authorities ofthe other Member State involved
shall be consulted beforehand on the authorisation of any managementcompany which is:
(a) a subsidiary ofanother management company, an investment f irm, a
credit institution or an insurance undertaking authorised in another
Member State,
(b) a subsidiary ofthe parent undertaking ofanother management
company, an investment firm, a credit institution or an insuranceundertaking authorised in another Member State, or
(c) controlled by the same natural or legal persons as control another
management company, an investment firm, a credit institution or aninsurance undertaking authorised in another Member State.
Title B
Relations with third countries
Article 5c
1. Relations with third countries shall be regulated in accordance with
the relevant rules laid down in Article 7 ofthe ISD.
For the purpose of this Directive, the expressions ‘firm/investment firm’
and ‘investment firms’ contained in Article 7 of the ISD shall beconstrued respectively as ‘management company’ and ‘managementcompanies’; the expression ‘providing investment services’ in Article7(2) ofthe ISD shall be construed as ‘providing services’.
2. The Member States shall also inform the Commission of any
general difficulties which UCITS encounter in marketing their units in
any third country.
Title C
Operating conditions
Article 5d
1. The competent authorities ofthe management company's home
Member State shall require that the management company which theyhave authorised complies at all times with the conditions laid down in
Article 5 and Article 5a(1) and (2) ofthis Directive. The own f unds ofa
management company may not fall below the level specified in Article5a(1)(a). Ifthey do, however, the competent authorities may, where thecircumstances justify it, allow such firms a limited period in which torectify their situations or cease their activities.
2. The prudential supervision ofa management company shall be the
responsibility ofthe competent authorities ofthe home Member State,
whether the management company establishes a branch or provides
services in another Member State or not, without prejudice to thoseprovisions ofthis Directive which give responsibility to the authoritiesofthe host country.
Article 5e
1. Qualifying holdings in management companies shall be subject to
the same rules as those laid down in Article 9 ofthe ISD.
2. For the purpose ofthis Directive, the expressions ‘f irm/investment
firm’ and ‘investment firms’ contained in Article 9 of the ISD shall beconstrued respectively as ‘management company’ and ‘managementcompanies’.
Article 5f
1. Each home Member State shall draw up prudential rules which
management companies, with regard to the activity ofmanagement ofUCITS authorised according to this Directive, shall observe at all times.1985L0611 — EN — 13.02.2002 — 004.001 — 9
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In particular, the competent authorities ofthe home Member State
having regard also to the nature ofthe UCITS managed by amanagement company, shall require that each such company:
(a) has sound administrative and accounting procedures, control and
safeguard arrangements for electronic data processing and adequateinternal control mechanisms including, in particular, rules for
personal transactions by its employees or for the holding or
management ofinvestments in f inancial instruments in order toinvest own funds and ensuring, inter alia , that each transaction
involving the fund may be reconstructed according to its origin, theparties to it, its nature, and the time and place at which it was
effected and that the assets of the unit trusts/common funds or of the
investment companies managed by the management company areinvested according to the fund rules or the instruments ofincorporation and the legal provisions in force;
(b) is structured and organised in such a way as to minimise the risk of
UCITS' or clients' interests being prejudiced by conflicts of interestbetween the company and its clients, between one ofits clients and
another, between one ofits clients and a UCITS or between two
UCITS. Nevertheless, where a branch is set up, the organisationalarrangements may not conflict with the rules of conduct laid downby the host Member State to cover conflicts of interest.
2. Each management company the authorisation ofwhich also covers
the discretionary portfolio management service mentioned in Article5(3)(a):
— shall not be permitted to invest all or a part ofthe investor's portf olio
in units ofunit trusts/common f unds or ofinvestment companies it
manages, unless it receives prior general approval from the client,
— shall be subject with regard to the services referred to in Article 5(3)
to the provisions laid down in Directive 97/9/EC ofthe EuropeanParliament and ofthe Council of3 March 1997 on investor-compensation schemes (
1).
Article 5g
1. IfMember States permit management companies to delegate to
third parties for the purpose of a more efficient conduct of thecompanies' business to carry out on their behalfone or more oftheir ownfunctions the following preconditions have to be complied with:
(a) the competent authority must be informed in an appropriate manner;
(b) the mandate shall not prevent the effectiveness of supervision over
the management company, and in particular it must not prevent themanagement company from acting, or the UCITS from beingmanaged, in the best interests ofits investors;
(c) when the delegation concerns the investment management, the
mandate may only be given to undertakings which are authorised or
registered for the purpose of asset management and subject to
prudential supervision; the delegation must be in accordance withinvestment-allocation criteria periodically laid down by the manage-ment companies;
(d) where the mandate concerns the investment management and is
given to a third-country undertaking, cooperation between the
supervisory authorities concerned must be ensured;
(e) a mandate with regard to the core function of investment manage-
ment shall not be given to the depositary or to any other undertakingwhose interests may conflict with those of the management companyor the unit-holders;
(f) measures shall exist which enable the persons who conduct the
business of the management company to monitor effectively at anytime the activity ofthe undertaking to which the mandate is given;1985L0611 — EN — 13.02.2002 — 004.001 — 10
(1) OJ L 84, 26.3.1997, p. 22.
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(g) the mandate shall not prevent the persons who conduct the business
ofthe management company to give at any time f urther instructionsto the undertaking to which functions are delegated and to withdraw
the mandate with immediate effect when this is in the interest of
investors;
(h) having regard to the nature ofthe f unctions to be delegated, the
undertaking to which functions will be delegated must be qualified
and capable ofundertaking the f unctions in question, and
(i) the UCITS' prospectuses list the functions which the management
company has been permitted to delegate.
2. In no case shall the management company's and the depositary's
liability be affected by the fact that the management company delegatedany functions to third parties, nor shall the management companydelegate its functions to the extent that it becomes a letter box entity.
Article 5h
Each Member State shall draw up rules ofconduct which management
companies authorised in that Member State shall observe at all times.
Such rules must implement at least the principles set out in the following
indents. These principles shall ensure that a management company:
(a) acts honestly and fairly in conducting its business activities in the
best interests ofthe UCITS it manages and the integrity ofthemarket;
(b) acts with due skill, care and diligence, in the best interests ofthe
UCITS it manages and the integrity ofthe market;
(c) has and employs effectively the resources and procedures that are
necessary for the proper performance of its business activities;
(d) tries to avoid conflicts of interests and, when they cannot be
avoided, ensures that the UCITS it manages are fairly treated, and
(e) complies with all regulatory requirements applicable to the conduct
ofits business activities so as to promote the best interests ofitsinvestors and the integrity ofthe market.
Title D
The right of establishment and the freedom to provide services
Article 6
1. Member States shall ensure that a management company,
authorised in accordance with this Directive by the competent
authorities ofanother Member State, may carry on within theirterritories the activity for which it has been authorised, either by theestablishment ofa branch or under the f reedom to provide services.
2. Member States may not make the establishment ofa branch or the
provision ofthe services subject to any authorisation requirement, to anyrequirement to provide endowment capital or to any other measure
having equivalent effect.
Article 6a
1. In addition to meeting the conditions imposed in Articles 5 and 5a,
any management company wishing to establish a branch within the
territory ofanother Member State shall notif y the competent authorities
ofits home Member State.
2. Member States shall require every management company wishing
to establish a branch within the territory ofanother Member State toprovide the following information and documents, when effecting thenotification provided for in paragraph 1:
(a) the Member State within the territory ofwhich the management
company plans to establish a branch;1985L0611 — EN — 13.02.2002 — 004.001 — 11
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(b) a programme ofoperations setting out the activities and services
according to Article 5(2) and (3) envisaged and the organisationalstructure ofthe branch;
(c) the address in the host Member State from which documents may be
obtained;
(d) the names ofthose responsible f or the management ofthe branch.
3. Unless the competent authorities ofthe home Member State have
reason to doubt the adequacy ofthe administrative structure or the
financial situation of a management company, taking into account the
activities envisaged, they shall, within three months ofreceiving all theinformation referred to in paragraph 2, communicate that information tothe competent authorities ofthe host Member State and shall inf orm themanagement company accordingly. They shall also communicate detailsofany compensation scheme intended to protect investors.
Where the competent authorities ofthe home Member State ref use to
communicate the information referred to in paragraph 2 to thecompetent authorities ofthe host Member State, they shall give reasonsfor their refusal to the management company concerned within twomonths of receiving all the information. That refusal or failure to reply
shall be subject to the right to apply to the courts in the home Member
State.
4. Before the branch of a management company starts business, the
competent authorities ofthe host Member State shall, within two monthsof receiving the information referred to in paragraph 2, prepare for the
supervision ofthe management company and, ifnecessary, indicate the
conditions, including the rules mentioned in Articles 44 and 45 in forcein the host Member State and the rules ofconduct to be respected in thecase ofprovision ofthe portf olio management service mentioned inArticle 5(3) and ofinvestment advisory services and custody, underwhich, in the interest ofthe general good, that business must be carried
on in the host Member State.
5. On receipt ofa communication f rom the competent authorities of
the host Member State or on the expiry ofthe period provided f or inparagraph 4 without receipt ofany communication f rom thoseauthorities, the branch may be established and start business. From
that moment the management company may also begin distributing the
units ofthe unit trusts/common f unds and ofthe investment companiessubject to this Directive which it manages, unless the competentauthorities ofthe host Member State establish, in a reasoned decisiontaken bef ore the expiry ofthat period oftwo months — to be
communicated to the competent authorities ofthe home Member State –
that the arrangements made for the marketing of the units do not complywith the provisions referred to in Article 44(1) and Article 45.
6. In the event ofchange ofany particulars communicated in
accordance with paragraphs 2(b), (c) or (d), a management companyshall give written notice ofthat change to the competent authorities of
the home and host Member States at least one month before
implementing the change so that the competent authorities ofthehome Member State may take a decision on the change under paragraph3 and the competent authorities ofthe host Member State may do sounder paragraph 4.
7. In the event ofa change in the particulars communicated in
accordance with the first subparagraph of paragraph 3, the authorities ofthe home Member State shall inform the authorities of the host MemberState accordingly.
Article 6b
1. Any management company wishing to carry on business within the
territory of another Member State for the first time under the freedom to
provide services shall communicate the following information to thecompetent authorities ofits home Member State:
(a) the Member State within the territory ofwhich the management
company intends to operate;1985L0611 — EN — 13.02.2002 — 004.001 — 12
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(b) a programme ofoperations stating the activities and services
referred to in Article 5(2) and (3) envisaged.
2. The competent authorities ofthe home Member State shall, within
one month of receiving the information referred to in paragraph 1,
forward it to the competent authorities of the host Member State.
They shall also communicate details ofany applicable compensation
scheme intended to protect investors.
3. The management company may then start business in the host
Member State notwithstanding the provisions ofArticle 46.
When appropriate, the competent authorities ofthe host Member State
shall, on receipt of the information referred to in paragraph 1, indicate tothe management company the conditions, including the rules ofconductto be respected in the case ofprovision ofthe portf olio managementservice mentioned in Article 5(3) and ofinvestment advisory services
and custody, with which, in the interest ofthe general good, the
management company must comply in the host Member State.
4. Should the content ofthe inf ormation communicated in accordance
with paragraph 1(b) be amended, the management company shall givenotice ofthe amendment in writing to the competent authorities ofthe
home Member State and ofthe host Member State bef ore implementing
the change, so that the competent authorities ofthe host Member Statemay, ifnecessary, inf orm the company ofany change or addition to bemade to the information communicated under paragraph 3.
5. A management company shall also be subject to the notification
procedure laid down in this Article in cases where it entrusts a third
party with the marketing ofthe units in a host Member State.
Article 6c
1. Host Member States may, for statistical purposes, require all
management companies with branches within their territories to reportperiodically on their activities in those host Member States to thecompetent authorities ofthose host Member States.
2. In discharging their responsibilities under this Directive, host
Member States may require branches ofmanagement companies to
provide the same particulars as national management companies for thatpurpose.
Host Member States may require management companies, carrying on
business within their territories under the freedom to provide services, to
provide the information necessary for the monitoring of their
compliance with the standards set by the host Member State that applyto them, although those requirements may not be more stringent thanthose which the same Member State imposes on established manage-ment companies for the monitoring of their compliance with the samestandards.
3. Where the competent authorities ofa host Member State ascertain
that a management company that has a branch or provides serviceswithin its territory is in breach ofthe legal or regulatory provisionsadopted in that State pursuant to those provisions ofthis Directive whichconfer powers on the host Member State's competent authorities, those
authorities shall require the management company concerned to put an
end to its irregular situation.
4. Ifthe management company concerned f ails to take the necessary
steps, the competent authorities ofthe host Member State shall inf ormthe competent authorities ofthe home Member State accordingly. Thelatter shall, at the earliest opportunity, take all appropriate measures to
ensure that the management company concerned puts an end to its
irregular situation. The nature ofthose measures shall be communicatedto the competent authorities ofthe host Member State.
5. If, despite the measures taken by the home Member State or
because such measures prove inadequate or are not available in theMember State in question, the management company persists in1985L0611 — EN — 13.02.2002 — 004.001 — 13
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breaching the legal or regulatory provisions referred to in paragraph 2 in
force in the host Member State, the latter may, after informing thecompetent authorities ofthe home Member State, take appropriate
measures to prevent or to penalise further irregularities and, insofar as
necessary, to prevent that management company from initiating anyfurther transaction within its territory. The Member States shall ensurethat within their territories it is possible to serve the legal documentsnecessary for those measures on management companies.
6. The foregoing provisions shall not affect the powers of host
Member States to take appropriate measures to prevent or to penalise
irregularities committed within their territories which are contrary tolegal or regulatory provisions adopted in the interest ofthe general good.This shall include the possibility of preventing offending managementcompanies from initiating any further transactions within theirterritories.
7. Any measure adopted pursuant to paragraphs 4, 5 or 6 involving
penalties or restrictions on the activities ofa management company must
be properly justified and communicated to the management companyconcerned. Every such measure shall be subject to the right to apply tothe courts in the Member State which adopted it.
8. Before following the procedure laid down in paragraphs 3, 4 or 5
the competent authorities ofthe host Member State may, in emergencies,
take any precautionary measures necessary to protect the interests of
investors and others for whom services are provided. The Commissionand the competent authorities ofthe other Member States concernedmust be informed of such measures at the earliest opportunity.
After consulting the competent authorities of the Member States
concerned, the Commission may decide that the Member State inquestion must amend or abolish those measures.
9. In the event ofthe withdrawal ofauthorisation, the competent
authorities ofthe host Member State shall be inf ormed and shall take
appropriate measures to prevent the management company concernedfrom initiating any further transactions within its territory and tosafeguard investors' interests. Every two years the Commission shallsubmit a report on such cases to the Contact Committee set up underArticle 53.
10. The Member States shall inform the Commission of the number
and type ofcases in which there have been ref usals pursuant to Article
6a or measures have been taken in accordance with paragraph 5. Everytwo years the Commission shall submit a report on such cases to theContact Committee set up under Article 53.
SECTION IIIa
Obligations regarding the depositary
Article 7
1. A unit trust's assets must be entrusted to a depositary for safe-
keeping.
2. A depositary's liability as referred to in Article 9 shall not be
affected by the fact that it has entrusted to a third party all or some of the
assets in 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 trust or by a managementcompany are carried out in accordance with the law and the fundrules;
(b) ensure that the value ofunits is calculated in accordance with the
law and the fund rules;
(c) carry out the instructions ofthe management company, unless they
conflict with the law or the fund rules;1985L0611 — EN — 13.02.2002 — 004.001 — 14
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(d) ensure that in transactions involving a unit trust's assets any
consideration is remitted to it within the usual time limits;
(e) ensure that a unit trust's income is applied in accordance with the
law and the fund rules.
Article 8
1. A depositary must either have its registered office in the same
Member State as that ofthe management company or be established inthat Member State if its registered office is in another Member State.
2. A depositary must be an institution which is subject to public
control. It must also furnish sufficient financial and professionalguarantees to be able effectively to pursue its business as depositary
and meet the commitments inherent in that function.
3. The Member States shall determine which ofthe categories of
institutions referred to in paragraph 2 shall be eligible to be depositaries.
Article 9
A depositary shall, in accordance with the national law ofthe State inwhich the management company's registered office is situated, be liableto the management company and the unit-holders for any loss sufferedby them as a result of its unjustifiable failure to perform its obligationsor its improper performance of them. Liability to unit-holders may be
invoked either directly or indirectly through the management company,
depending on the legal nature ofthe relationship between the depositary,the management company and the unit-holders.
Article 10
1. No single company shall act as both management company anddepositary.
2. In the context oftheir respective roles the management company
and the depositary must act independently and solely in the interest ofthe unit-holders.
Article 11
The law or the fund rules shall lay down the conditions for thereplacement ofthe management company and the depositary and rules to
ensure the protection ofunit-holders in the event ofsuch replacement.
SECTION IV
Obligationsregardinginvestmentcompanies 
Title A
Conditions for taking up business
Article 12
Access to the business ofinvestment companies shall be subject to prior
official authorisation to be granted by the home Member Statescompetent authorities.
The Member States shall determine the legal form which an investment
company must take.
Article 13
No investment company may engage in activities other than thosereferred to in Article 1 (2).1985L0611 — EN — 13.02.2002 — 004.001 — 15
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Article 13a
1. Without prejudice to other conditions ofgeneral application laid
down by national law, the competent authorities shall not grantauthorisation to an investment company that has not designated amanagement company unless the investment company has a sufficientinitial capital ofat least EUR 300 000.
In addition, when an investment company has not designated a
management company authorised pursuant to this Directive:
— the authorisation shall not be granted unless the application for
authorisation is accompanied by a programme ofactivity setting out,inter alia , the organisational structure ofthe investment company;
— the directors ofthe investment company shall be ofsuf f iciently good
repute and be sufficiently experienced also in relation to the type ofbusiness carried out by the investment company. To that end, the
names ofthe directors and ofevery person succeeding them in of f ice
must be communicated forthwith to the competent authorities. Theconduct ofan investment company's business must be decided by atleast two persons meeting such conditions. Directors shall meanthose persons who, under the law or the instruments ofincorporation,
represent the investment company, or who effectively determine the
policy ofthe company;
— moreover, where close links exist between the investment company
and other natural or legal persons, the competent authorities shallgrant authorisation only if those do not prevent the effective exerciseoftheir supervisory f unctions.
The competent authorities shall also refuse authorisation if the laws,
regulations or administrative provisions ofa non-member countrygoverning one or more natural or legal persons with which theinvestment company has close links, or difficulties involved in their
enforcement, prevent the effective exercise of their supervisory
functions.
The competent authorities shall require investment companies to provide
them with the information they require.
2. An applicant shall be informed, within six months of the
submission ofa complete application, whether or not authorisation hasbeen granted. Reasons shall be given whenever an authorisation isrefused.
3. An investment company may start business as soon as authorisa-
tion has been granted.
4. The competent authorities may withdraw the authorisation issued
to an investment company subject to this Directive only where that
company:
(a) does not make use ofthe authorisation within 12 months, expressly
renounces the authorisation or has ceased the activity covered bythis Directive more than 6 months previously unless the MemberState concerned has provided for authorisation to lapse in such
cases;
(b) has obtained the authorisation by making false statements or by any
other irregular means;
(c) no longer fulfils the conditions under which authorisation was
granted;
(d) has seriously and/or systematically infringed the provisions adopted
pursuant to this Directive; or
(e) falls within any of the cases where national law provides for
withdrawal.1985L0611 — EN — 13.02.2002 — 004.001 — 16
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Title B
Operating conditions
Article 13b
Articles 5g and 5h shall apply to investment companies that have not
designated a management company authorised pursuant to this
Directive. For the purpose ofthis Article ‘management company’ shallbe construed as ‘investment company’.
Investment companies may only manage assets oftheir own portf olio
and may not, under any circumstances, receive any mandate to manage
assets on behalfofa third party.
Article 13c
Each home Member State shall draw up prudential rules which shall be
observed at all times by investment companies that have not designateda management company authorised pursuant to this Directive.
In particular, the competent authorities ofthe home Member State,
having regard also to the nature ofthe investment company, shall require
that the company has sound administrative and accounting procedures,control and safeguard arrangements for electronic data processing andadequate internal control mechanisms including, in particular, rules forpersonal transactions by its employees or for the holding or managementofinvestments in f inancial instruments in order to invest its initial
capital and ensuring, inter alia , that each transaction involving the
company may be reconstructed according to its origin, the parties to it,its nature, and the time and place at which it was effected and that theassets ofthe investment company are invested according to theinstruments ofincorporation and the legal provisions in f orce.
SECTION IVa
Obligations regarding the depositary
Article 14
1. An investment company's assets must be entrusted to a depositary
for safe-keeping.
2. A depositary's liability as referred to in Article 16 shall not be
affected by the fact that it has entrusted to a third party all or some of the
assets in its safe-keeping.
3. A depositary must, moreover:
(a) ensure that the sale, issue, re-purchase, redemption and cancellation
of untis effected by or on behalf of a company are carried out inaccordance with the law and with the company's instruments ofincorporation;
(b) ensure that in transactions involving a company's assets any
consideration is remitted to it within the usual time limits;
(c) ensure that a company's income is applied in accordance with the
law and its instruments ofincorporation.
4. A Member State may decide that investment companies situated
within its territory which market their units exclusively through one ormore stock exchanges on which their units are admitted to official listingshall not be required to have depositaries within the meaning ofthis
Directive.
Articles 34, 37 and 38 shall not apply to such companies. However, the
rules for the valuation of such companies' assets must be stated in law orin their instruments ofincorporation.
5. A Member State may decide that investment companies situated
within its territory which market at least 80 % oftheir-units through oneor more stock exchanges designated in their instruments ofincorporationshall not be required to have depositaries within the meaning ofthis1985L0611 — EN — 13.02.2002 — 004.001 — 17
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Directive provided that their units are admitted to official listing on the
stock exchanges ofthose Member States within the territories ofwhichthe units are marketed, and that any transactions which such a company
may effect outwith stock exchanges are effected at stock exchange
prices only. A company's instruments ofincorporation must specif y thestock exchange in the country ofmarketing the prices on which shalldetermine the prices at which that company will effect any transactionsoutwith stock exchanges in that country.
A Member State shall avail itselfofthe option provided f or in the
preceding subparagraph only ifit considers that unit-holders haveprotection equivalent to that ofunit-holders in UCITS which havedepositaries within the meaning ofthis Directive.
In particular, such companies and the companies referred to in paragraph
4, must:
(a) in the absence ofprovision in law, state in their instruments of
incorporation the methods ofcalculation ofthe net asset values oftheir units;
(b) intervene on the market to prevent the stock exchange values oftheir
units from deviating by more than 5 % from their net asset values;
(c) establish the net asset values oftheir units, communicate them to the
competent authorities at least twice a week and publish them twice amonth.
At least twice a month, an independent auditor must ensure that the
calculation ofthe value ofunits is ef f ected in accordance with the law
and the company's instruments ofincorporation. On such occasions, the
auditor must make sure that the company's assets are invested inaccordance with the rules laid down by law and the company'sinstruments ofincorporation.
6. The Member States shall inform the Commission of the identities
of the companies benefiting from the derogations provided for in
paragraphs 4 and 5.
The Commission shall report to the Contact Committee on the
application ofparagraphs 4 and 5 within f ive years ofthe implementa-tion ofthis Directive. Af ter obtaining the Contact Committee's opinion,
the Commission shall, ifneed be, propose appropriate measures.
Article 15
1. A depositary must either have its registered office in the same
Member State as that ofthe investment company or be established inthat Member State if its registered office is in another Member State.
2. A depositary must be an institution which is subject to public
control. It must also furnish sufficient financial and professional
guarantees to be able effectively to pursue its business as depositaryand meet the commitments inherent in that function.
3. The Member States shall determine which ofthe categories of
institutions referred to in paragraph 2 shall be eligible to be depositaries.
Article 16
A depositary shall, in accordance with the national law ofthe State in
which the investment company's registered office is situated, be liable tothe investment company and the unit-holders for any loss suffered bythem as a result of its unjustifiable failure to perform its obligations, orits improper performance of them.
Article 17
1. No single company shall act as both investment company and
depositary.
2. In carrying out its role as depositary, the depositary must act solely
in the interests ofthe unit-holders.1985L0611 — EN — 13.02.2002 — 004.001 — 18
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Article 18
The law or the investment company's instruments ofincorporation shall
lay down the conditions for the replacement of the depositary and rulesto ensure the protection ofunit-holders in the event ofsuch replacement.
SECTION V
Obligations concerning the investment policies of UCITS
Article 19
1. The investments ofa unit trust or ofan investment company must
consist solely of:
(a) transferable securities and money market instruments admitted to or
dealt in on a regulated market within the meaning ofArticle 1(13) ofthe ISD and/or;
(b) transferable securities ►
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dealt in on another regulated market in a Member State which
operates regularly and is recognized and open to the public and/or;
(c) transferable securities ►M5and money market instruments ◄
admitted to official listing on a stock exchange in a non-memberState or dealt in on another regulated market in a non-member Statewhich operates regularly and is recognized and open to the public
provided that the choice ofstock exchange or market has been
approved by the competent authorities or is provided for in law orthe fund rules or the investment company's instruments ofincorporation and/or;
(d) recently issued transferable securities, provided that:
— the terms ofissue include an undertaking that application will be
made for admission to official listing on a stock exchange or to
another regulated market which operates regularly and isrecognized and open to the public, provided that the choice ofstock exchange or market has been approved by the competentauthorities or is provided for in law or the fund rules or the
investment company's instruments ofincorporation;
— such admission is secured within a year ofissue ►
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or;◄
(e) units ofUCITS authorised according to this Directive and/or other
collective investment undertakings within the meaning ofthe f irst
and second indent ofArticle 1(2), should they be situated in a
Member State or not, provided that:
— such other collective investment undertakings are authorised
under laws which provide that they are subject to supervisionconsidered by the UCITS' competent authorities to be equivalent
to that laid down in Community law, and that cooperation
between authorities is sufficiently ensured;
— the level ofprotection f or unit-holders in the other collective
investment undertakings is equivalent to that provided for unit-
holders in a UCITS, and in particular that the rules on assets
segregation, borrowing, lending, and uncovered sales oftransferable securities and money market instruments areequivalent to the requirements ofthis Directive;
— the business ofthe other collective investment undertakings is
reported in half-yearly and annual reports to enable anassessment to be made ofthe assets and liabilities, income andoperations over the reporting period;
— no more than 10 % ofthe UCITS' or the other collective
investment undertakings' assets, whose acquisition is contem-plated, can, according to their fund rules or instruments ofincorporation, be invested in aggregate in units ofother UCITSor other collective investment undertakings and/or;1985L0611 — EN — 13.02.2002 — 004.001 — 19
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(f) deposits with credit institutions which are repayable on demand or
have the right to be withdrawn, and maturing in no more than 12
months, provided that the credit institution has its registered office
in a Member State or, if the registered office of the credit institution
is situated in a non-Member State, provided that it is subject toprudential rules considered by the UCITS' competent authorities asequivalent to those laid down in Community law and/or;
(g) financial derivative instruments, including equivalent cash-settled
instruments, dealt in on a regulated market referred to insubparagraphs (a), (b) and (c); and/or financial derivative instru-ments dealt in over-the-counter (‘OTC derivatives’), provided that:
— the underlying consists ofinstruments covered by this paragraph,
financial indices, interest rates, foreign exchange rates or
currencies, in which the UCITS may invest according to its
investment objectives as stated in the UCITS' fund rules orinstruments ofincorporation;
— the counterparties to OTC derivative transactions are institutions
subject to prudential supervision, and belonging to the categoriesapproved by the UCITS' competent authorities and;
— the OTC derivatives are subject to reliable and verifiable
valuation on a daily basis and can be sold, liquidated or closedby an offsetting transaction at any time at their fair value at theUCITS'initiative,and/or;
(h) money market instruments other than those dealt in on a regulated
market, which fall under Article 1(9), if the issue or issuer of suchinstruments is itselfregulated f or the purpose ofprotecting investorsand savings, and provided that they are:
— issued or guaranteed by a central, regional or local authority or
central bank ofa Member State, the European Central Bank, the
European Union or the European Investment Bank, a non-Member State or, in the case ofa Federal State, by one ofthe
members making up the federation, or by a public international
body to which one or more Member States belong or;
— issued by an undertaking any securities ofwhich are dealt in on
regulated markets referred to in subparagraphs (a), (b) or (c), or;
— issued or guaranteed by an establishment subject to prudential
supervision, in accordance with criteria defined by Communitylaw, or by an establishment which is subject to and complies
with prudential rules considered by the competent authorities to
be at least as stringent as those laid down by Community law or;
— issued by other bodies belonging to the categories approved by
the UCITS' competent authorities provided that investments insuch instruments are subject to investor protection equivalent tothat laid down in the first, the second or the third indent and
provided that the issuer is a company whose capital and reserves
amount to at least EUR 10 million and which presents andpublishes its annual accounts in accordance with Directive 78/660/EEC (
1), is an entity which, within a group ofcompanies
which includes one or several listed companies, is dedicated to
the financing of the group or is an entity which is dedicated to
the financing of securitisation vehicles which benefit from abanking liquidity line.
2. However:
(a) a UCITS may invest no more than 10 % ofits assets in transf erable
securities ►
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referred to in paragraph 1;1985L0611 — EN — 13.02.2002 — 004.001 — 20
(1) Fourth Council Directive 78/660/EEC of25 July 1978 based on Article
54(3)(g) ofthe Treaty on the annual accounts ofcertain types ofcompanies
(OJ L 222, 14.8.1978, p. 11). Directive as last amended by Directive 1999/60/
EC (OJ L 162, 26.6.1999, p. 65).▼B
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(c) an investment company may acquire movable and immovable
property which is essential for the direct pursuit of its business;
(d) a UCITS may not acquire either precious metals or certificates
representing them.
4. Unit trusts and investment companies may hold ancillary liquidassets.
Article 21
1. The management or investment company must employ a risk-
management process which enables it to monitor and measure at any
time the risk ofthe positions and their contribution to the overall risk
profile of the portfolio; it must employ a process for accurate andindependent assessment ofthe value ofOTC derivative instruments. Itmust communicate to the competent authorities regularly and inaccordance with the detailed rules they shall define, the types ofderivative instruments, the underlying risks, the quantitative limits and
the methods which are chosen in order to estimate the risks associated
with transactions in derivative instruments regarding each managedUCITS.
2. The Member States may authorise UCITS to employ techniques
and instruments relating to transferable securities and money marketinstruments under the conditions and within the limits which they lay
down provided that such techniques and instruments are used for the
purpose of efficient portfolio management. When these operationsconcern the use ofderivative instruments, these conditions and limitsshall conform to the provisions laid down in this Directive.
Under no circumstances shall these operations cause the UCITS to
diverge from its investment objectives as laid down in the UCITS' fundrules, instruments ofincorporation or prospectus.
3. A UCITS shall ensure that its global exposure relating to derivative
instruments does not exceed the total net value ofits portf olio.
The exposure is calculated taking into account the current value ofthe
underlying assets, the counterparty risk, future market movements and
the time available to liquidate the positions. This shall also apply to thefollowing subparagraphs.
A UCITS may invest, as a part ofits investment policy and within the
limit laid down in Article 22(5), in financial derivative instrumentsprovided that the exposure to the underlying assets does not exceed inaggregate the investment limits laid down in Article 22. The Member
States may allow that, when a UCITS invests in index-based financial
derivative instruments, these investments do not have to be combined tothe limits laid down in Article 22.
When a transferable security or money market instrument embeds a
derivative, the latter must be taken into account when complying withthe requirements ofthis Article.
4. The Member States shall send the Commission full information
and any subsequent changes in their regulation concerning the methods
used to calculate the risk exposures mentioned in paragraph 3, including
the risk exposure to a counterparty in OTC derivative transactions, nolater than 13 February 2004. The Commission shall forward thatinformation to the other Member States. Such information will be thesubject ofexchanges ofviews within the Contact Committee inaccordance with the procedure laid down in Article 53(4).1985L0611 — EN — 13.02.2002 — 004.001 — 21
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Article 22
1. A UCITS may invest no more than 5 % ofits assets in transf erable
securities or money market instruments issued by the same body. AUCITS may not invest more than 20 % ofits assets in deposits madewith the same body.
The risk exposure to a counterparty ofthe UCITS in an OTC derivative
transaction may not exceed:
— 10 % ofits assets when the counterpart is a credit institution ref erred
to in Article 19(1)(f), or
— 5 % ofits assets, in other cases.
2. Member States may raise the 5 % limit laid down in the first
sentence ofparagraph 1 to a maximum of10 %. However, the totalvalue ofthe transf erable securities and the money market instruments
held by the UCITS in the issuing bodies in each ofwhich it invests more
than 5 % ofits assets must not then exceed 40 % ofthe value ofitsassets. This limitation does not apply to deposits and OTC derivativetransactions made with financial institutions subject to prudentialsupervision.
Notwithstanding the individual limits laid down in paragraph 1, a
UCITS may not combine:
— investments in transferable securities or money market instruments
issued by,
— deposits made with, and/or
— exposures arising from OTC derivative transactions undertaken with
a single body in excess of20 % ofits assets.
3. The Member States may raise the 5 % limit laid down in the first
sentence ofparagraph 1 to a maximum of35 % ifthe transf erable
securities or money market instruments are issued or guaranteed by a
Member State, by its local authorities, by a non-member State or bypublic international bodies to which one or more Member States belong.
4. Member States may raise the 5 % limit laid down in the first
sentence ofparagraph 1 to a maximum of25 % in the case ofcertain
bonds when these are issued by a credit institution which has itsregistered office in a Member State and is subject by law to specialpublic supervision designed to protect bond-holders. In particular, sumsderiving from the issue of these bonds must be invested in conformity
with the law in assets which, during the whole period ofvalidity ofthe
bonds, are capable ofcovering claims attaching to the bonds and which,in the event of failure of the issuer, would be used on a priority basis forthe reimbursement ofthe principal and payment ofthe accrued interest.
When a UCITS invests more than 5 % ofits assets in the bonds ref erred
to in the first subparagraph and issued by one issuer, the total value ofthese investments may not exceed 80 % ofthe value ofthe assets oftheUCITS.
The Member States shall send the Commission a list ofthe
aforementioned categories of bonds together with the categories ofissuers authorised, in accordance with the laws and supervisoryarrangements mentioned in the first subparagraph, to issue bondscomplying with the criteria set out above. A notice specifying the status
of the guarantees offered shall be attached to these lists. The
Commission shall immediately forward that information to the otherMember States together with any comments which it considersappropriate, and shall make the information available to the public.Such communications may be the subject ofexchanges ofviews within
the Contact Committee in accordance with the procedure laid down in
Article 53(4).
5. The transferable securities and money market instruments referred
to in paragraphs 3 and 4 shall not be taken into account for the purpose
ofapplying the limit of40 % ref erred to in paragraph 2.
The limits provided for in paragraphs 1, 2, 3 and 4 may not be
combined, and thus investments in transferable securities or money1985L0611 — EN — 13.02.2002 — 004.001 — 22
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market instruments issued by the same body or in deposits or derivative
instruments made with this body carried out in accordance withparagraphs 1, 2, 3 and 4 shall under no circumstances exceed in total
35 % ofthe assets ofthe UCITS.
Companies which are included in the same group for the purposes of
consolidated accounts, as defined in accordance with Directive 83/349/EEC (
1) or in accordance with recognised international accounting rules,
are regarded as a single body for the purpose of calculating the limitscontained in this Article.
Member States may allow cumulative investment in transferable
securities and money market instruments within the same group up toa limit of20 %.
Article 22a
1. Without prejudice to the limits laid down in Article 25, the
Member States may raise the limits laid down in Article 22 to amaximum of20 % f or investment in shares and/or debt securities issuedby the same body when, according to the fund rules or instruments of
incorporation, the aim ofthe UCITS' investment policy is to replicate
the composition ofa certain stock or debt securities index which isrecognised by the competent authorities, on the following basis:
— its composition is sufficiently diversified,
— the index represents an adequate benchmark for the market to which
it refers,
— it is published in an appropriate manner.
2. Member States may raise the limit laid down in paragraph 1 to a
maximum of35 % where that proves to be justif ied by exceptional
market conditions in particular in regulated markets where certaintransferable securities or money market instruments are highlydominant. The investment up to this limit is only permitted for a singleissuer.
Article 23
1. By way ofderogation f rom Article 22 and without prejudice to
Article 68 (3) ofthe Treaty, the Member States may authorize UCITS toinvest in accordance with the principle ofrisk-spreading up to 100 % oftheir assets in different transferable securities ►
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instruments ◄issued or guaranteed by any Member State, its local
authorities, a non-member State or public international bodies ofwhichone or more Member States are members.
The competent authorities shall grant such a derogation only ifthey
consider that unit-holders in the UCITS have protection equivalent tothat ofunit-holders in UCITS complying with the limits laid down inArticle 22.
Such a UCITS must hold securities from at least six different issues, but
securities from any one issue may not account for more than 30 % of its
total assets.
2. The UCITS referred to in paragraph 1 must make express mention
in the fund rules or in the investment company's instruments of
incorporation ofthe States, local authorities or public internationalbodies issuing or guaranteeing securities in which they intend to investmore than 35 % oftheir assets; such f und rules or instruments ofincorporation must be approved by the competent authorities.
3. In addition each such UCITS referred to in paragraph 1 must
include a prominent statement in its prospectus and any promotionalliterature drawing attention to such authorization and indicating the1985L0611 — EN — 13.02.2002 — 004.001 — 23
(1) Seventh Council Directive 83/349/EEC of13 June 1983 based on the Article
54(3)(g) ofthe Treaty on consolidated accounts (OJ L 193, 18.7.1983, p. 1).
Directive as last amended by the 1994 Act ofAccession.▼B
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States, local authorities and/or public international bodies in the
securities ofwhich it intends to invest or has invested more than 35 %ofits assets.
Article 24
1. A UCITS may acquire the units ofUCITS and/or other collective
investment undertakings referred to in Article 19(1)(e), provided that nomore than 10 % ofits assets are invested in units ofa single UCITS orother collective investment undertaking. The Member States may raise
the limit to a maximum of20 %.
2. Investments made in units ofcollective investment undertakings
other than UCITS may not exceed, in aggregate, 30 % ofthe assets of
the UCITS.
The Member States may allow that, when a UCITS has acquired units of
UCITS and/or other collective investment undertakings, the assets ofthe
respective UCITS or other collective investment undertakings do nothave to be combined for the purposes of the limits laid down in Article22.
3. When a UCITS invests in the units ofother UCITS and/or other
collective investment undertakings that are managed, directly or bydelegation, by the same management company or by any other company
with which the management company is linked by common manage-
ment or control, or by a substantial direct or indirect holding, thatmanagement company or other company may not charge subscription orredemption fees on account of the UCITS's investment in the units ofsuch other UCITS and/or collective investment undertakings.
A UCITS that invests a substantial proportion ofits assets in other
UCITS and/or collective investment undertakings shall disclose in itsprospectus the maximum level ofthe management f ees that may be
charged both to the UCITS itselfand to the other UCITS and/or
collective investment undertakings in which it intends to invest. In itsannual report it shall indicate the maximum proportion ofmanagementfees charged both to the UCITS itself and to the UCITS and/or othercollective investment undertaking in which it invests.
Article 24a
1. The prospectus shall indicate in which categories ofassets a
UCITS is authorised to invest. It shall mention iftransactions infinancial derivative instruments are authorised; in this event, it mustinclude a prominent statement indicating ifthese operations may becarried out for the purpose of hedging or with the aim of meeting
investment goals, and the possible outcome ofthe use off inancial
derivative instruments on the risk profile.
2. When a UCITS invests principally in any category ofassets
defined in Article 19 other than transferable securities and moneymarket instruments or replicates a stock or debt securities index inaccordance with Article 22a, its prospectus and, where necessary, anyother promotional literature must include a prominent statement drawingattention to the investment policy.
3. When the net asset value ofa UCITS is likely to have a high
volatility due to its portfolio composition or the portfolio management
techniques that may be used, its prospectus and, where necessary, any
other promotional literature must include a prominent statement drawingattention to this characteristic.
4. Upon request ofan investor, the management company must also
provide supplementary information relating to the quantitative limitsthat apply in the risk management ofthe UCITS, to the methods chosento this end and to the recent evolution ofthe main instrument categories'risks and yields.1985L0611 — EN — 13.02.2002 — 004.001 — 24
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Article 25
1. An investment company or a management company acting in
connection with all ofthe unit trusts which it manages and which f allwithin the scope ofthis Directive may not acquire any shares carrying
voting rights which would enable it to exercise significant influence over
the management ofan issuing body.
Pending further coordination, the Member States shall take account of
existing rules defining the principle stated in the first subparagraphunder other Member States' legislation.
2. Moreover, an investment company or unit trust may acquire no
more than:
— 10 % ofthe non-voting shares ofany single issuing body;
— 10 % ofthe debt securities ofany single issuing body;
— 25 % ofthe units ofany single UCITS and/or other collective
investment undertaking within the meaning ofthe f irst and secondindent ofArticle 1(2);
— 10 % ofthe money market instruments ofany single issuing body.
The limits laid down in the second, third and fourth indents may be
disregarded at the time ofacquisition ifat that time the gross amount ofthe debt securities or ofthe money market instruments, or the netamount ofthe securities in issue, cannot be calculated.
3. A Member State may waive application ofparagraphs 1 and 2 as
regards:
(a) transferable securities ►
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issued or guaranteed by a Member State or its local authorities;
(b) transferable securities ►M5and money market instruments ◄
issued or guaranteed by a non-member State;
(c) transferable securities ►M5and money market instruments ◄
issued by public international bodies ofwhich one or more MemberStates are members;
(d) shares held by a UCITS in the capital ofa company incorporated in
a non-member State investing its assets mainly in the securities ofissuing bodies having their registered offices in that State, whereunder the legislation ofthat State such a holding represents the onlyway in which the UCITS can invest in the securities ofissuing
bodies ofthat State. This derogation, however, shall apply only ifin
its investment policy the company from the non-member Statecomplies with the limits laid down in Articles 22, 24 and 25 (1) and(2). Where the limits set in Articles 22 and 24 are exceeded. Article26 shall apply mutatis mutandis;
(e) shares held by an investment company or investment companies in
the capital ofsubsidiary companies carrying on only the business ofmanagement, advice or marketing in the country where thesubsidiary is located, in regard to the repurchase ofunits at unit-holders' request exclusively on its or their behalf.
Article 26
1. UCITS need not comply with the limits laid down in this section
when exercising subscription rights attaching to transferable securities ormoney market instruments which form part of their assets.
While ensuring observance ofthe principle ofrisk spreading, the
Member States may allow recently authorised UCITS to derogate fromArticles 22, 22a, 23 and 24 for six months following the date of theirauthorisation.1985L0611 — EN — 13.02.2002 — 004.001 — 25
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2. If the limits referred to in paragraph 1 are exceeded for reasons
beyond the control ofa UCITS or as a result ofthe exercise ofsubscription rights, that UCITS must adopt as a priority objective for its
sales transactions the remedying ofthat situation, taking due account of
the interests ofits unit-holders.
SECTION VI
Obligationsconcerninginformationtobesuppliedtounit­holders
A. Publication ofa prospectus and periodical reports
Article 27
1. An investment company and, for each of the unit trusts andcommon funds it manages, a management company, must publish:
— a simplified prospectus,
— a full prospectus,
— an annual report for each financial year, and
— a half-yearly report covering the first six months of the financial
year.
2. The annual and half-yearly reports must be published within the
following time limits, with effect from the ends of the periods to whichthey relate:
— four months in the case of the annual report,
— two months in the case ofthe half -yearly report.
Article 28
1. Both the simplified and the full prospectuses must include the
information necessary for investors to be able to make an informedjudgement ofthe investment proposed to them, and, in particular, oftherisks attached thereto. The latter shall include, independent oftheinstruments invested in, a clear and easily understandable explanation ofthe fund's risk profile.
2. The full prospectus shall contain at least the information provided
for in Schedule A, Annex I to this Directive, in so far as that informationdoes not already appear in the fund rules or instruments of incorporation
annexed to the full prospectus in accordance with Article 29(1).
3. The simplified prospectus shall contain in summary form the key
information provided for in Schedule C, Annex I to this Directive. It
shall be structured and written in such a way that it can be easily
understood by the average investor. Member States may permit that thesimplified prospectus be attached to the full prospectus as a removablepart ofit. The simplif ied prospectus can be used as a marketing tooldesigned to be used in all Member States without alterations except
translation. Member States may therefore not require any further
documents or additional information to be added.
4. Both the full and the simplified prospectus may be incorporated in
a written document or in any durable medium having an equivalent legal
status approved by the competent authorities.
5. The annual report must include a balance-sheet or a statement of
assets and liabilities, a detailed income and expenditure account for the
financial year, a report on the activities of the financial year and theother information provided for in Schedule B, Annex I to this Directive,as well as any significant information which will enable investors tomake an inf ormed judgment on the development ofthe activities oftheUCITS and its results.
6. The half-yearly report must include at least the information
provided for in Chapters I to IV of Schedule B, Annex I to thisDirective; where a UCITS has paid or proposes to pay an interim1985L0611 — EN — 13.02.2002 — 004.001 — 26
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dividend, the figures must indicate the results after tax for the half-year
concerned and the interim dividend paid or proposed.
Article 29
1. The fund rules or an investment company's instruments of
incorporation shall form an integral part of the full prospectus and
must be annexed thereto.
2. The documents referred to in paragraph 1 need not, however, be
annexed to the full prospectus provided that the unit-holder is informedthat on request he or she will be sent those documents or be apprised ofthe place where, in each Member State in which the units are placed on
the market, he or she may consult them.
Article 30
The essential elements of the simplified and the full prospectuses must
be kept up to date.
Article 31
The accounting information given in the annual report must be audited
by one or more persons empowered by law to audit accounts in
accordance with Council Directive 84/253/EEC of10 April 1984 based
on Article 54 (3) (g) ofthe EEC Treaty on the approval ofpersonsresponsible for carrying out the statutory audits of accountingdocuments (
1). The auditor's report, including any qualifications, shall
be reproduced in full in the annual report.
Article 32
UCITS must send their simplified and full prospectuses and any
amendments thereto, as well as their annual and half-yearly reports, tothe competent authorities.
Article 33
1. The simplified prospectus must be offered to subscribers free of
charge before the conclusion of the contract.
In addition, the full prospectus and the latest published annual and half-
yearly reports shall be supplied to subscribers free of charge on request.
2. The annual and half-yearly reports shall be supplied to unit-holders
free of charge on request.
3. The annual and half-yearly reports must be available to the public
at the places, or through other means approved by the competentauthorities, specified in the full and simplified prospectus.
B. Publication ofother inf ormation
Article 34
A UCITS must make public in an appropriate manner the issue, sale, re-
purchase or redemption price ofits units each time it issues, sells, re-purchases or redeems them, and at least twice a month. The competentauthorities may, however, permit a UCITS to reduce the frequency toonce a month on condition that such a derogation does not prejudice theinterests ofthe unit-holders.1985L0611 — EN — 13.02.2002 — 004.001 — 27
(1) OJ No L 126, 12. 5. 1984, p. 20.▼B
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Article 35
All publicity comprising an invitation to purchase the units ofUCITS
must indicate that prospectuses exist and the places where they may beobtained by the public or how the public may have access to them.
SECTION VII
The general obligations of UCITS
Article 36
1. Neither:
— an investment company, nor
— a management company or depositary acting on behalfofa unit trust,
may borrow.
However, a UCTIS may acquire foreign currency by means of a ‘back-
to-back’ loan.
2. By way ofderogation f rom paragraph 1, a Member State may
authorize a UCITS to borrow:
(a) up to 10 %
— ofits assets, in the case ofan investment company, or
— ofthe value ofthe f und, in the case ofa unit trust,
provided that the borrowing is on a temporary basis;
(b) up to 10 % ofits assets, in the case ofan investment company,
provided that the borrowing is to make possible the acquisition of
immovable property essential for the direct pursuit of its business; in
this case the borrowing and that referred to in subparagraph (a) maynot in any case in total exceed 15 % ofthe borrower's assets.
Article 37
1. A UCITS must re-purchase or redeem its units at the request ofany
unit-holder.
2. By way ofderogation f rom paragraph 1:
(a) a UCITS may, in the cases and according to the procedures provided
for by law, the fund rules or the investment company's instrumentsofincorporation, temporarily suspend the re-purchase or redemptionofits units. Suspension may be provided f or only in exceptional
cases where circumstances so require, and suspension is justified
having regard to the interests ofthe unit-holders;
(b) the Member States may allow the competent authorities to require
the suspension ofthe re-purchase or redemption ofunits in theinterest ofthe unit-holders or ofthe public.
3. In the cases mentioned in paragraph 2 (a), a UCITS must without
delay communicate its decision to the competent authorities and to the
authorities ofall Member States in which it markets its units.
Article 38
The rules for the valuation of assets and the rules for calculating the sale
or issue price and the re-purchase or redemption price ofthe units ofaUCITS must be laid down in the law, in the fund rules or in theinvestment company's instruments ofincorporation.
Article 39
The distribution or reinvestment ofthe income ofa unit trust or ofan
investment company shall be effected in accordance with the law andwith the fund rules or the investment company's instruments ofincorporation.1985L0611 — EN — 13.02.2002 — 004.001 — 28
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Article 40
A UCITS unit may not be issued unless the equivalent ofthe net issue
price is paid into the assets ofthe UCITS within the usual time limits.This provision shall not preclude the distribution ofbonus units.
Article 41
1. Without prejudice to the application ofArticles 19 and 21, neither:
— an investment company, nor
— a management company or depositary acting on behalfofa unit trust
may grant loans or act as a guarantor on behalfofthird parties.
2. Paragraph 1 shall not prevent such undertakings from acquiring
transferable securities, money market instruments or other financialinstruments referred to in Article 19(1)(e), (g) and (h) which are notfully paid.
Article 42
Neither:
— an investment company, nor
— a management company or depositary acting on behalfofa unit trust
may carry out uncovered sales oftransf erable securities, money market
instruments or other financial instruments referred to in Article 19(1)(e),(g) and (h).
Article 43
The law or the fund rules must prescribe the remuneration and the
expenditure which a management company is empowered to charge to aunit trust and the method ofcalculation ofsuch remuneration.
The law or an investment company's instruments ofincorporation must
prescribe the nature ofthe cost to be borne by the company.
SECTION VIII
Special provisions applicable to UCITS which market their units in
Member States other than those in which they are situated
Article 44
1. A UCITS which markets its units in another Member State must
comply with the laws, regulations and administrative provisions in forcein that State which do not fall within the field governed by this
Directive.
2. Any UCITS may advertise its units in the Member State in which
they are marketed. it must comply the provisions governing advertising
in that State.
3. The provisions referred to in paragraphs 1 and 2 must be applied
without discrimination.
Article 45
In the case referred to in Article 44, the UCITS must, inter alia, in
accordance with the laws, regulations and administrative provisions inforce in the Member State of marketing, take the measures necessary toensure that facilities are available in that State for making payments tounit-holders, re-purchasing or redeeming units and making available theinformation which UCITS are obliged to provide.1985L0611 — EN — 13.02.2002 — 004.001 — 29
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Article 46
Ifa UCITS proposes to market its units in a Member State other than
that in which it is situated, it must first inform the competent authoritiesofthat other Member State accordingly. It must simultaneously send the
latter authorities:
— an attestation by the competent authorities to the effect that it fulfils
the conditions imposed by this Directive,
— its fund rules or its instruments of incorporation,
— its full and simplified prospectuses,
— where appropriate, its latest annual report and any subsequent half-
yearly report, and
— details ofthe arrangements made ofthe marketing ofits units in that
other Member State.
An investment company or a management company may begin to
market its units in that other Member State two months after suchcommunication, unless the authorities ofthe Member States concernedestablish, in a reasoned decision taken before the expiry of that period of
two months, that the arrangements made for the marketing of units do
not comply with the provisions referred to in Article 44(1) and Article45.
Article 47
Ifa UCITS markets its units in a Member State other than that in which
it is situated, it must distribute in that other Member State, in accordance
with the same procedures as those provided for in the home MemberState, the full and simplified prospectuses, the annual and half-yearlyreports and the other information provided for in Articles 29 and 30.
These documents shall be provided in the or one of the official
languages ofthe host Member State or in a language approved by thecompetent authorities ofthe host Member State.
Article 48
For the purpose ofcarrying on its activities, a UCITS may use the same
generic name (such as investment company or unit trust) in theCommunity as it uses in the Member State in which it is situated. In the
event ofany danger ofconf usion, the host Member State may, f or the
purpose ofclarif ication, require that the name be accompanied bycertain explanatory particulars.
SECTION IX
Provisions concerning the authorities responsible for authorization
and supervision
Article 49
1. The Member States shall designate the authorities which are to
carry out the duties provided for in this Directive. They shall inform theCommission thereof, indicating any division of duties.
2. The authorities referred to in paragraph 1 must be public
authorities or bodies appointed by public authorities.
3. The authorities ofthe State in which a UCITS is situated shall be
competent to supervise that UCITS. However, the authorities oftheState in which a UCITS markets its units in accordance with Article 44shall be competent to supervise compliance with Section VIII.
4. The authorities concerned must be granted all the powers
necessary to carry out their task.1985L0611 — EN — 13.02.2002 — 004.001 — 30
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Article 50
1. The authorities ofthe Member States ref erred to in Article 49 shall
collaborate closely in order to carry out their task and must for that
purpose alone communicate to each other all information required.
2. Member States shall provide that all persons who work or who
have worked for the competent authorities, as well as auditors andexperts instructed by the competent authorities, shall be bound by the
obligation ofprof essional secrecy. Such secrecy implies that no
confidential information which they may receive in the course of theirduties may be divulged to any person or authority whatsoever, save insummary or aggregate form such that Ucits and management companiesand depositaries (hereinafter referred to as undertakings contributingtowards their business activity) cannot be individually identified,
without prejudice to cases covered by criminal law.
Nevertheless, when an Ucits or an undertaking contributing towards its
business activity has been declared bankrupt or is being compulsorilywound up, confidential information which does not concern third partiesinvolved in rescue attempts may be divulged in civil or commercialproceedings.
3. Paragraph 2 shall not prevent the competent authorities ofthe
various Member States from exchanging information in accordance withthis Directive or other Directives applicable to Ucits or to undertakingscontributing towards their business activity. That information shall besubject to the conditions ofprof essional secrecy imposed in paragraph 2.
4. Member States may conclude cooperation agreements providing
for exchange of information with the competent authorities of thirdcountries or with authorities or bodies ofthird countries as def ined inparagraphs 6 and 7 only ifthe inf ormation disclosed is subject toguarantees of professional secrecy at least equivalent to those referred to
in this Article. Such exchange of information must be intended for the
perf ormance ofthe supervisory task ofthe authorities or bodiesmentioned.
Where the information originates in another Member State, it may not be
disclosed without the express agreement ofthe competent authoritieswhich have disclosed it and, where appropriate, solely for the purposes
for which those authorities gave their agreement.
5. Competent authorities receiving confidential information under
paragraphs 2 or 3 may use it only in the course oftheir duties:
— to check that the conditions governing the taking-up ofthe business
ofUcits or ofundertakings contributing towards their businessactivity are met and to facilitate the monitoring of the conduct of thatbusiness, administrative and accounting procedures and internal-control mechanisms,
— to impose sanctions,— in administrative appeals against decisions by the competent
authorities, or
— in court proceedings initiated under Article 51 (2).
6. Paragraphs 2 and 5 shall not preclude the exchange ofinf ormation:
(a) within a Member State, where there are two or more competent
authorities; or
(b) within a Member State or between Member States, between
competent authorities; and
— authorities with public responsibility for the supervision of credit
institutions, investment undertakings, insurance undertakings andother financial organizations and the authorities responsible forthe supervision off inancial markets,1985L0611 — EN — 13.02.2002 — 004.001 — 31
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— bodies involved in the liquidation or bankruptcy ofUcits and
other similar procedures and ofundertakings contributingtowards their business activity,
— persons responsible for carrying out statutory audits of the
accounts ofinsurance undertakings, credit institutions, invest-
ment undertakings and other financial institutions,
in the performance of their supervisory functions, or the disclosure
to bodies which administer compensation schemes ofinf ormationnecessary for the performance of their functions. Such informationshall be subject to the conditions ofprof essional secrecy imposed in
paragraph 2.
7. Notwithstanding paragraphs 2 to 5, Member States may authorize
exchanges ofinf ormation between the competent authorities and:
— the authorities responsible for overseeing the bodies involved in the
liquidation and bankruptcy ofundertakings f or collective investmentin transferable securities (Ucits) or undertakings contributingtowards their business activity and other similar procedures, or
— the authorities responsible for overseeing persons charged with
carrying out statutory audits ofthe accounts ofinsurance under-takings, credit institutions, investment firms and other financial
institutions.
Member States which have recourse to the option provided for in the
first subparagraph shall require at least that the following conditions aremet:
— the information shall be for the purpose of performing the task of
overseeing referred to in the first subparagraph,
— information received in this context shall be subject to the conditions
ofprof essional secrecy imposed in paragraph 2,
— where the information originates in another Member State, it may
not be disclosed without the express agreement ofthe competentauthorities which have disclosed it and, where appropriate, solely forthe purposes for which those authorities gave their agreement.
Member States shall communicate to the Commission and to the other
Member States the names ofthe authorities which may receiveinformation pursuant to this paragraph.
8. Notwithstanding paragraphs 2 to 5, Member States may, with the
aim ofstrengthening the stability, including integrity, ofthe f inancialsystem, authorize the exchange ofinf ormation between the competent
authorities and the authorities or bodies responsible under the law for the
detection and investigation ofbreaches ofcompany law.
Member States which have recourse to the option provided for in the
first subparagraph shall require at least that the following conditons aremet:
— the information shall be for the purpose of performing the task
referred to in the first subparagraph,
— information received in this context shall be subject to the conditions
ofprof essional secrecy imposed in paragraph 2,
— where the information originates in another Member State, it may
not be disclosed without the express agreement ofthe competentauthorities which have disclosed it and, where appropriate, solely for
the purposes for which those authorities gave their agreement.
Where, in a Member State, the authorities or bodies referred to in the
first subparagraph perform their task of detection or investigation withthe aid, in view oftheir specif ic competence, ofpersons appointed f orthat purpose and not employed in the public sector the possibility of
exchanging information provided for in the first subparagraph may be
extended to such persons under the conditions stipulated in the secondsubparagraph.
In order to implement the final indent of the second subparagraph, the
authorities or bodies referred to in the first subparagraph shallcommunicate to the competent authorities which have disclosed the1985L0611 — EN — 13.02.2002 — 004.001 — 32
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information the names and precise responsibilities of the persons to
whom it is to be sent.
Member States shall communicate to the Commission and to the other
Member States the names ofthe authorities or bodies which may receiveinformation pursuant to this paragraph.
Before 31 December 2000, the Commission shall draw up a report on
the application ofthis paragraph.
9. This Article shall not prevent a competent authority from
transmitting to central banks and other bodies with a similar function
in their capacity as monetary authorities information intended for the
performance of their tasks, nor shall it prevent such authorities or bodiesfrom communicating to the competent authorities such information asthey may need for the purposes of paragraph 5. Information received inthis context shall be subject to the conditions ofprof essional secrecy
imposed in this Article.
10. This Article shall not prevent the competent authorities from
communicating the information referred to in paragraphs 2 to 5 to aclearing house or other similar body recognized under national law for
the provision ofclearing or settlement services f or one oftheir Member
State's markets ifthey consider that it is necessary to communicate theinformation in order to ensure the proper functioning of those bodies inrelation to defaults or potential defaults by market participants. Theinformation received in this context shall be subject to the conditions ofprofessional secrecy imposed in paragraph 2. Member States shall,
however, ensure that information received under paragraph 3 may not be
disclosed in the circumstances referred to in this paragraph without theexpress consent ofthe competent authorities which disclosed it.
11. In addition, notwithstanding the provisions referred to in
paragraphs 2 and 5, Member States may, by virtue ofprovisions laid
down by law, authorize the disclosure ofcertain inf ormation to otherdepartments oftheir central government administrations responsible f orlegislation on the supervision ofUcits and ofundertakings contributingtowards their business activity, credit institutions, financial institutions,
investment undertakings and insurance undertakings and to inspectors
instructed by those departments.
Such disclosures may, however, be made only where necessary for
reasons ofprudential control.
Member States shall, however, provide that information received under
paragraphs 3 and 6 may never be disclosed in the circumstances referredto in this paragraph except with the express agreement ofthe competentauthorities which disclosed the information.
Article 50a
1. Member States shall provide at least that:
(a) any person authorized within the meaning ofDirective 84/253/
EEC (
1), performing in an undertaking for collective investment in
transferable securities (Ucits) or an undertaking contributing towardsits business activity the task described in Article 51 ofDirective 78/660/EEC (
2), Article 37 ofDirective 83/349/EEC or Article 31 of
Directive 85/611/EEC or any other statutory task, shall have a duty
to report promptly to the competent authorities any fact or decisionconcerning that undertaking ofwhich he has become aware whilecarrying out that task which is liable to:
— constitute a material breach ofthe laws, regulations or
administrative provisions which lay down the conditionsgoverning authorization or which specifically govern pursuit ofthe activities ofundertakings f or collective investment in1985L0611 — EN — 13.02.2002 — 004.001 — 33
(1) OJ No L 126, 12. 5. 1984, p. 20.
(2) OJ No L 222, 14. 8. 1978, p. 11. Directive as last amended by Directive 90/
605/EEC (OJ No L 317, 16. 11. 1990, p. 60).
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transferable securities (Ucits) or undertakings contributing
towards their business activity, or
— affect the continuous functioning of the undertaking for
collective investment in transferable securities (Ucits) or anundertaking contributing towards its business activity, or
— lead to refusal to certify the accounts or to the expression of
reservations;
(b) that person shall likewise have a duty to report any facts and
decisions ofwhich he becomes aware in the course ofcarrying out atask as described in (a) in an undertaking having close links resulting
from a control relationship with the undertaking for collective
investment in transferable securities (Ucits) or an undertakingcontributing towards its business activity within which he is carryingout the abovementioned task.
2. The disclosure in good faith to the competent authorities, by
persons authorized within the meaning ofDirective 84/253/EEC, ofanyfact or decision referred to in paragraph 1 shall not constitute a breach ofany restriction on disclosure ofinf ormation imposed by contract ofby
any legislative, regulatory or administrative provision and shall not
involce such persons in liability ofany kind.
Article 51
1. The authorities referred to in Article 49 must give reasons for any
decision to refuse authorization, and any negative decision taken inimplementation ofthe general measures adopted in application ofthis
Directive, and communicate them to applicants.
2. The Member States shall provide that decisions taken in respect of
a UCITS pursuant to laws, regulations and administrative provisions
adopted in accordance with this Directive are subject to the right to
apply to the courts; the same shall apply ifno decision is taken withinsix months ofits submission on an authorization application made by aUCITS which includes all the information required under the provisionsin force.
Article 52
1. Only the authorities ofthe Member State in which a UCITS is
situated shall have the power to take action against it ifit inf ringes anylaw, regulation or administrative provision or any regulation laid downin the fund rules or in the investment company's instruments ofincorporation.
2. Nevertheless, the authorities ofthe Member State in which the
units ofa UCITS are marketed may take action against it ifit inf ringes
the provisions referred to in Section VIII.
3. Any decision to withdraw authorization, or any other serious
measure taken against a UCITS, or any suspension ofre-purchase or
redemption imposed upon it, must be communicated without delay by
the authorities ofthe Member State in which the UCITS in question issituated to the authorities ofthe other Member States in which its unitsare marketed.
Article 52a
1. Where, through the provision ofservices or by the establishment of
branches, a management company operates in one or more host Member
States, the competent authorities ofall the Member States concernedshall collaborate closely.
They shall supply one another on request with all the information
concerning the management and ownership ofsuch managementcompanies that is likely to facilitate their supervision and all informationlikely to facilitate the monitoring of such companies. In particular, theauthorities ofthe home Member State shall cooperate to ensure that the1985L0611 — EN — 13.02.2002 — 004.001 — 34
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authorities ofthe host Member State collect the particulars ref erred to in
Article 6c(2).
2. Insofar as it is necessary for the purpose of exercising their powers
ofsupervision, the competent authorities ofthe home Member Stateshall be informed by the competent authorities of the host Member Stateofany measures taken by the host Member State pursuant to Article
6c(6) which involve penalties imposed on a management company or
restrictions on a management company's activities.
Article 52b
1. Each host Member State shall ensure that, where a management
company authorised in another Member State carries on business withinits territory through a branch, the competent authorities ofthemanagement company's home Member State may, after informing thecompetent authorities ofthe host Member State, themselves or through
the intermediary ofpersons they instruct f or the purpose, carry out on-
the-spot verification of the information referred to in Article 52a.
2. The competent authorities ofthe management company's home
Member State may also ask the competent authorities ofthe manage-
ment company's host Member State to have such verification carried out.Authorities which receive such requests must, within the framework oftheir powers, act upon them by carrying out the verifications themselves,by allowing the authorities who have requested them to carry them outor by allowing auditors or experts to do so.
3. This Article shall not affect the right of the competent authorities
ofthe host Member State, in discharging their responsibilities under thisDirective, to carry out on-the-spot verifications of branches established
within their territory.
SECTION X
Contact Committee
Article 53
1. A Contact Committee, hereinafter referred to as ‘the Committee’,
shall be set up alongside the Commission. Its function shall be:
(a) to facilitate, without prejudice to Articles 169 and 170 of the Treaty,
the harmonized implementation ofthis Directive through regular
consultations on any practical problems arising from its applicationand on which exchanges ofviews are deemed usef ul;
(b) to facilitate consultation between Member States either on more
rigorous or additional requirements which they may adopt inaccordance with Article 1 (7), or on the provisions which they mayadopt in accordance with Articles 44 and 45;
(c) to advise the Commission, ifnecessary, on additions or amendments
to be made to this Directive.
2. It shall not be the function of the Committee to appraise the merits
ofdecisions taken in individual cases by the authorities ref erred to inArticle 49.
3. The Committee shall be composed ofpersons appointed by the
Member States and ofrepresentatives ofthe Commission. The Chairmanshall be a representative ofthe Commission. Secretarial services shall be
provided by the Commission.
4. Meetings ofthe Committee shall be convened by its chairman,
either on his own initiative or at the request ofa Member State
delegation. The Committee shall draw up its rules ofprocedure.
Article 53a
1. In addition to its functions provided for in Article 53(1), the
Contact Committee may also meet as a Regulatory Committee within1985L0611 — EN — 13.02.2002 — 004.001 — 35
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the meaning ofArticle 5 ofDecision 1999/468/EC (1) to assist the
Commission in regard to the technical modifications to be made to thisDirective in the following areas:
— clarification of the definitions in order to ensure uniform application
ofthis Directive throughout the Community,
— alignment of terminology and the framing of definitions in
accordance with subsequent acts on UCITS and related matters.
2. Where reference is made to this paragraph, Articles 5 and 7 of
Decision 1999/468/EC shall apply, having regard to the provisions ofArticle 8 thereof.
The period provided for in Article 5(6) of Decision 1999/468/EC shall
be set at three months.
3. The Committee shall adopt its rules ofprocedure.
SECTION XI
Transitional provisions, derogations and final provisions
Article 54
Solely for the purpose of Danish UCITS, pantebreve issued in Denmark
shall be treated as equivalent to the transferable securities referred to in
Article 19 (1) (b).
Article 55
By way ofderogation f rom Articles 7 (1) and 14 (1), the competent
authorities may authorize those UCITS which, on the date ofadoption of
this Directive, had two or more depositaries in accordance with their
national law to maintain that number ofdepositaries ifthose authoritieshave guarantees that the functions to be performed under Articles 7 (3)and 14 (3) will be performed in practice.
Article 56
1. By way ofderogation f rom Article 6, the Member States may
authorize management companies to issue bearer certificates repre-senting the registered securities ofother companies.
2. The Member States may authorize those management companies
which, on the date ofadoption ofthis Directive, also carry on activitiesother than those provided for in Article 6 to continue those otheractivities for five years after that date.
Article 57
1. The Member States shall bring into force no later than 1 October
1989 the measures necessary for them to comply with this Directive.They shall forthwith inform the Commission thereof.
2. The Member States may grant UCITS existing on the date of
implementation ofthis Directive a period ofnot more than 12 months
from that date in order to comply with the new national legislation.
3. The Hellenic Republic and the Portuguese Republic shall be
authorized to postpone the implementation ofthis Directive until 1 April
1992 at the latest.
One year before that date the Commission shall report to the Council on
progress in implementing the Directive and on any difficulties which theHellenic Republic or the Portuguese Republic may encounter inimplementing the Directive by the date referred to in the firstsubparagraph.1985L0611 — EN — 13.02.2002 — 004.001 — 36
(1) OJ L 184, 17.7.1999, p. 23.▼B
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The Commission shall, ifnecessary, propose that the Council extend the
postponement by up to four years.
Article 58
The Member States shall ensure that the Commission is informed of the
texts ofthe main laws, regulations and administrative provisons which
they adopt in the field covered by this Directive.
Article 59
This Directive is addressed to the Member States.1985L0611 — EN — 13.02.2002 — 004.001 — 37
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ANNEX►M4I◄
SCHEDULE A
1.Information concerning
the unit trust1.Information concerningthe management company 1.Information concerningthe investment company
1.1. Name 1.1. Name or style, form in
law, registered office and
head office if different
from the registered
office.1.1. Name or style, form in law,
registered office and head
office if different from the
registered office.
1.2. Date ofestablishment of
the unit trust. Indication of
duration, iflimited.1.2. Date ofincorporation of
the company. Indication
ofduration, iflimited.1.2. Date ofthe incorporation of
the company. Indication of
duration, iflimited.
1.3. Ifthe company manages
other unit trusts, indica-
tion ofthose other trusts.►
M41.3. In the case of
investment companies
having different investment
compartments, the indica-
tion ofthe
compartments. ◄
1.4. Statement ofthe place
where the fund rules, if
they are not annexed, and
periodic reports may be
obtained.1.4. Statement ofthe place
where the instruments of
incorporation, ifthey are
not annexed, and periodical
reports may be obtained.
1.5. Briefindications relevant
to unit-holders ofthe tax
system applicable to the
unit trust. Details of
whether deductions are
made at source from the
income and capital gains
paid by the trust to unit-
holders.1.5. Briefindications relevant to
unit-holders ofthe tax
system applicable to the
company. Details of
whether deductions are
made at source from the
income and capital gains
paid by the company to
unit-holders.
1.6. Accounting and distribu-
tion dates1.6. Accounting and distribution
dates.
1.7. Names ofthe persons
responsible for auditing
the accounting information
referred to in Article 31.1.7. Names ofthe persons
responsible for auditing
the accounting information
referred to in Article 31.
1.8. Names and positions in
the company ofthe
members ofthe adminis-
trative, management and
supervisory bodies.
Details oftheir main
activities outside the
company where these
are ofsignif icance withrespect to that company.1.8. Names and positions in the
company ofthe members of
the administrative, manage-
ment and supervisory
bodies. Details oftheir
main activities outside the
company where these are of
significance with respect to
that company.
1.9. Amount ofthe subscribed
capital with an indication
ofthe capital paid-up1.9. Capital1985L0611 — EN — 13.02.2002 — 004.001 — 38
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1.Information concerning
the unit trust1.Information concerningthe management company 1.Information concerningthe investment company
1.10. Details ofthe types and
main characteristics ofthe
units and in particular:
— the nature ofthe right
(real, personal or
other) represented by
the unit,
— original securities or
certificates providing
evidence oftitle; entry
in a register or in an
account,
— characteristics ofthe
units: registered or
bearer. Indication of
any denominations
which may be
provided for,
— indication ofunit-
holders' voting rights
ifthese exist,
— circumstances in
which winding-up of
the unit trust can be
decided on and
winding-up procedure,
in particular as regards
the rights ofunit-
holders.1.10. Details ofthe types and
main characteristics ofthe
units and in particular:
— original securities or
certificates providing
evidence oftitle; entry
in a register or in an
account,
— characteristics ofthe
units: registered or
bearer. Indication of
any denominations
which may be
provided for,
— indication ofunit-
holders' voting rights,
— circumstances in
which winding-up of
the investment
company can be
decided on and
winding-up procedure,
in particular as regards
the rights ofunit-
holders.
1.11. Where applicable, indica-
tion ofstock exchanges or
markets where the units
are listed or dealt in.1.11. Where applicable, indica-
tion ofstock exchanges or
markets where the units
are listed or dealt in.
1.12. Procedures and conditions
ofissue and sale ofunits.1.12. Procedures and conditions
ofissue and sale ofunits.
1.13. Procedures and conditions
for re-purchase or
redemption ofunits, and
circumstances in which
re-purchase or redemption
may be suspended.1.13. Procedures and conditions
for re-purchase or
redemption ofunits, and
circumstances in which
re-purchase or redemption
may be suspended.
►
M4In the case of
investment companies
having different invest-
ment compartments,
information on how a
unit-holder may pass
from one compartment
into another and the
charges applicable in
such cases. ◄
1.14. Description ofrules f or
determining and applying
income.1.14. Description ofrules f or
determining and applying
income.1985L0611 — EN — 13.02.2002 — 004.001 — 39
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1.Information concerning
the unit trust1.Information concerningthe management company 1.Information concerningthe investment company
1.15. Description ofthe unit
trust's investment objec-
tives, including its
financial objectives (e.g.
capital growth or income),
investment policy (e.g.
specialization in geogra-
phical or industrial
sectors), any limitations
on that investment policy
and an indication ofany
techniques and instru-
ments or borrowing
powers which may be
used in the management
ofthe unit trust.1.15. Description ofthe
company's investment
objectives, including its
financial objectives (e.g.
capital growth or income),
investment policy (e.g.
specialization in geogra-
phical or industrial
sectors), any limitations
on that investment policy
and an indication ofany
techniques and instru-
ments or borrowing
powers which may be
used in the management
ofthe company.
1.16. Rules for the valuation of
assets.1.16. Rules for the valuation of
assets.
1.17. Determination ofthe sale
or issue price and the re-purchase or redemption
price ofunits, in parti-
cular:
— the method and
frequency of the
calculation ofthose
prices,
— information
concerning thecharges relating to
the sale or issue and
the re-purchase or
redemption ofunits,
— the means, places and
frequency of the
publication ofthose
prices.1.17. Determination ofthe sale
or issue price and the re-
purchase or redemption
price ofunits, in parti-
cular:
— the method and
frequency of the
calculation ofthose
prices,
— information
concerning the chargesrelating to the sale or
issue and the re-
purchase or redemp-
tion ofunits,
— the means, places and
frequency of the publi-
cation ofthose
prices(
1).
1.18. Information concerning
the manner, amount and
calculation ofremunera-
tion payable by the unit
trust to the management
company, the depositary
or third parties, and reim-
bursement ofcosts by the
unit trust to the manage-
ment company, to the
depositary or to third
parties.1.18. Information concerning
the manner, amount and
calculation ofremunera-
tion paid by the company
to its directors, and
members ofthe adminis-
trative, management and
supervisory bodies, to the
depositary, or to third
parties, and reimburse-
ment ofcosts by the
company to its directors,
to the depositary or to
third parties.
(1) Investment companies within the meaning ofArticle 14 (5) ofthe Directive shall also indicate:
— the method and f requency ofcalculation ofthe net asset value ofunits,
— the means, place and f requency ofthe publication ofthat value,
— the stock exchange in the country ofmarketing the price on which determines the price oftransactions ef f ected
outwith stock exchanges in that country.
2. Information concerning the depositary:
2.1. Name or style, form in law, registered office and head office if different
from the registered office;
2.2. Main activity.
3. Information concerning the advisory firms or external investment advisers
who give advice under contract which is paid f or out ofthe assets ofthe
UCITS:
3.1. Name or style ofthe f irm or name ofthe adviser;1985L0611 — EN — 13.02.2002 — 004.001 — 40
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3.2. Material provisions ofthe contract with the management company or the
investment company which may be relevant to the unit-holders,
excluding those relating to remuneration;
3.3. Other significant activities.
4. Information concerning the arrangements for making payments to unit-
holders, re-purchasing or redeeming units and making available information
concerning the UCITS. Such information must in any case be given in the
Member State in which the UCITS is situated. In addition, where units are
marketed in another Member State, such information shall be given in respect
ofthat Member State in the prospectus published there.
5. Other investment information:
5.1. Historical performance of the unit trust/common fund or of the
investment company (where applicable) — such information may be
either included in or attached to the prospectus.
5.2. Profile of the typical investor for whom the unit trust/common fund or
the investment company is designed.
6. Economic information:
6.1. Possible expenses or fees, other than the charges mentioned in paragraph
1.17, distinguishing between those to be paid by the unit-holder and
those to be paid out ofthe unit trust's/common f und's or ofthe
investment company's assets.1985L0611 — EN — 13.02.2002 — 004.001 — 41
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SCHEDULE B
Information to be included in the periodic reports
I.Statement of assets and liabilities
— transferable securities,
— debt instruments ofthe type ref erred to in Article 19 (2) (b),— bank balances,— other assets,
— total assets,
— liabilities,— net asset value.
II.Number of units in circulation
III.Net asset value per unit
IV.Portfolio, distinguishing between:
(a) transferable securities admitted to official stock exchange listing;
(b) transferable securities dealt in on another regulated market;
(c) recently issued transferable securities of the type referred to in Article
19 (1) (d);
(d) other transferable securities of the type referred to in Article 19 (2) (a);
(e) debt instruments treated as equivalent in accordance with Article 19 (2)
(b);
and analyzed in accordance with the most appropriate criteria in the light of
the investment policy ofthe UCITS (e. g. in accordance with economic,
geographical or currency criteria) as a percentage ofnet assets; f or each of
the above investments the proportion it represents ofthe total assets ofthe
UCITS should be stated.
Statement ofchanges in the composition ofthe portf olio during the
reference period.
V.Statement of the developments concerning the assets of the UCITS during
the reference period including the following:
— income from investments,
— other income,— management charges,— depositary's charges,— other charges and taxes,— net income,— distributions and income reinvested,— changes in capital account,— appreciation or depreciation ofinvestments,
— any other changes affecting the assets and liabilities of the UCITS.
VI.A comparative table covering the last three financial years and including,
for each financial year, at the end of the financial year:
— the total net asset value,
— the net asset value per unit.
VII.Details, by category of transaction within the meaning of Article 21 carried
out by the UCITS during the reference period, of the resulting amount of
commitments.1985L0611 — EN — 13.02.2002 — 004.001 — 42
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SCHEDULE C
Contents of the simplified prospectus
Brief presentation of the UCITS
— when the unit trust/common fund or the investment company was created and
indication ofthe Member State where the unit trust/common f und or the
investment company has been registered/incorporated,
— in the case of UCITS having different investment compartments, the
indication ofthis circumstance,
— management company (when applicable),— expected period ofexistence (when applicable),— depositary,— auditors,— financial group (e.g. a bank) promoting the UCITS.
Investment information
— short definition of the UCITS' objectives,
— the unit trust's/common fund's or the investment company's investment policy
and a brief assessment of the fund's risk profile (including, if applicable,
information according to Article 24a and by investment compartment),
— historical performance of the unit trust/common fund/investment company
(where applicable) and a warning that this is not an indicator off uture
performance — such information may be either included in or attached to the
prospectus,
— profile of the typical investor the unit trust/common fund or the investment
company is designed for.
Economic information
— tax regime,
— entry and exit commissions,— other possible expenses or fees, distinguishing between those to be paid by the
unit-holder and those to be paid out ofthe unit trust's/common f und's or the
investment company's assets.
Commercial information
— how to buy the units,
— how to sell the units,— in the case of UCITS having different investment compartments how to pass
from one investment compartment into another and the charges applicable in
such cases,
— when and how dividends on units or shares ofthe UCITS (ifapplicable) are
distributed,
— frequency and where/how prices are published or made available.
Additional information
— statement that, on request, the full prospectus, the annual and half-yearly
reports may be obtained free of charge before the conclusion of the contract
and afterwards,
— competent authority,— indication ofa contact point (person/department, timing, etc.) where
additional explanations may be obtained ifneeded,
— publishing date ofthe prospectus.1985L0611 — EN — 13.02.2002 — 004.001 — 43
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ANNEX II
Functions included in the activity of collective portfolio management:
— Investment management.
— Administration:
(a) legal and fund management accounting services;
(b) customer inquiries;
(c) valuation and pricing (including tax returns);
(d) regulatory compliance monitoring;
(e) maintenance ofunit-holder register;
(f) distribution of income;
(g) unit issues and redemptions;
(h) contract settlements (including certificate dispatch);
(i) record keeping.
— Marketing.1985L0611 — EN — 13.02.2002 — 004.001 — 44