OPINION OF THE COMMISSION pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty, on the European Parliament's amendment to the Council's common position regarding the proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

1998/0242 (COD)

OPINION OF THE COMMISSION pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty, on the European Parliament's amendment to the Council's common position regarding the proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses

1. BACKGROUND

On 17 July 1998 the Commission sent to the European Parliament and the Council a proposal for a directive [1] to amend Directive 85/611/EEC [2] on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), with a view to regulating management companies and simplified prospectuses.

[1] COM(1998) 451 final (OJ C 272, 01.09.1998, p. 7).

[2] OJ L 375, 31.12.1985, p. 3. Directive as last amended by Directive 2000/64/EC (OJ L 290, 17.11.2000, p. 27).

The Economic and Social Committee delivered its opinion at its 361st plenary session on 24 and 25 February 1999. [3] At the request of the Council, the European Central Bank delivered its opinion on 16 March 1999 [4].

[3] OJ C 116, 28.04.1999, p. 1.

[4] OJ C 285, 7.10.1999, p. 9.

On 17 February 2000 the European Parliament adoptedits legislative resolution on first reading [5],comprising 13 amendments to the Commission proposal.

[5] OJ C 339, 29.11.2000, p. 228, Rapporteur: O. Schmidt.

On 30 May 2000 the Commission adopted an amended proposal [6] taking account of the consultation of Parliament and the Economic and Social Committee.

[6] COM(2000) 331 final (OJ C 311 E, 31.10.2000, p. 273).

The Council adopted its common position [7] on 5 June 2001.

[7] OJ C 297, 23.10.2001, p. 10.

On 28 June 2001 the Commission adopted its communication to the European Parliament [8] on the Council's common position.

[8] SEC(2001)1004 final.

On 23 October 2001 the European Parliament voted on second reading one amendment to the common position.

2. PURPOSE OF THE PROPOSAL

The main purpose of the proposal is to reinforce the single market in the UCITS field by updating the rules for management companies, thereby providing them with a European Passport mechanism and a wider range of potential activities, and introducing a simplified prospectus for investors. The Council's common position has also introduced, inter alia, further harmonisation of the legal framework for investment companies, especially self-managed ones, i.e. those which have not designated a management company.

Together with a joint proposal concerning the investments of UCITS [9], this proposal forms part of the Financial Services Action Plan, which is due to be completed by 2005 [10].

[9] Commission initial proposal (COM(1998) 449 final) and amended proposal (COM(2000) 329 final): OJ C 311 E, 31.10.2000, p. 302. Council's Common Position: OJ C 297, 23.10.2001, p. 35.

[10] COM(1999)232, 11.05.1999.

3. COMMISSION OPINION ON PARLIAMENT'S AMENDMENT

On second reading, the European Parliament adopted a single amendment (Amendment 2) to the Council's common position.

For the reasons set out below the Commission can accept this amendment.

Amendment 2 modifies the timeframe of an existing provision of the proposal, which would request the Commission to perform a review of capital requirements applying to UCITS management companies within five years of the entry into force of this Directive. Amendment 2 shortens this deadline to three years from the entry into force, in order to align it with the timeframe laid down in the general review clause introduced by Amendment 3, paragraph 1 (tabled in respect of the first UCITS proposal).

Despite this shortening of the timeframe, the Commission can accept Amendment 2, as a signal of a strong commitment to monitor closely the implementation of the present UCITS proposal and propose any further initiatives that may be needed.

4. CONCLUSIONS

The Commission therefore fully accepts the amendment voted by the European Parliament on second reading.