II.
Proposal for a European Parliament and Council directive amending Council Directive 85/611/EEC
on the coordination of laws, regulations and administrative provisions relating to undertakings forcollective investments in transferable securities (UCITS) with a view to regulating management
companies and simplified prospectuses (COM(1998) 451 Wdash C4-0465/1998 Wdash 1998/0242(COD))
The proposal was amended as follows:
TEXT PROPOSED
BY THE COMMISSION (1)AMENDMENTS
BY PARLIAMENT
(Amendment 22)
Recital 15a (new)
(15a) Whereas a codification of the Community legisla-
tion relating to UCITS will have to be prepared immedi-ately after the adoption of the modifications to Directive85/611/EEC contained in this Directive;
(Amendment 23)
ARTICLE 1(1)
Article 1a(2) (Directive 85/611/EEC)
2. management company shall mean any company the regu-
lar business of which is the management of unit trusts/common funds and of investment companies (collectiveportfolio management);2. management company shall mean any company the regu-
lar business of which is the management of the assets of
unit trusts/common funds and of investment companies(collective portfolio management) including the activities
mentioned in Annex II ;
(Amendment 24)
ARTICLE 1(3)
Article 5(4a) (new) (Directive 85/611/EEC)
4a. The competent authorities shall not grant authorisa-
tion, or shall withdraw authorisation from a UCITS,where factors such as the content of programmes ofoperations, the geographical distribution or the activitiesactually carried on indicate clearly that the entity hasopted for the legal system of one Member State for thepurpose of evading the stricter standards in force inanother Member State within the territory of which itintends to carry on or does carry on the greater part ofits activities.
(Amendment 41/rev.)
ARTICLE 1(3)
Article 5a(1), first twoindents (Directive 85/611/EEC)
vdash it has sufficient initial capital of the following amount : vdash it has initial capital of at least € 150000. In addition,
it shall maintain certain capital requirements that areat least equivalent to the higher of the following
amounts:
(a) if it is authorised to manage only unit trusts/common funds
and investment companies, € 50000;(a) an amount of capital to be determined in accor-
dance with the rules laid down in Directive 93/6/EEC, having regard to the nature of the servicesprovided;
(1)OJ C 272, 1.9.1998, p. 7.C 339/228 EN 29.11.2000 Official Journal of the European Communities
Thursday 17 February 2000
(b) if its authorisation covers also the discretionary portfolio
management service mentioned in Article 5(3), first indent,in addition to the capital mentioned in the previous letter
(a), an amount of capital to be determined in accordance
with the rules laid down in Article 3, paragraphs 1 and 2of Directive 93/6/EEC(
1) having regard tothe nature o f the
service in question;(b) an amount of capital to be determined by apply-
ing the following scale to the total amount of theassets managed:
Wdash 0,1% up to € 1000 million managed;
Wdash € 1 million plus 0,02% of assets managed in
excess of € 1000 million, subject to a ceilingof € 10 million.
xdash the persons who effectively direct the business of a management
company are of sufficiently good repute and are sufficiently
experienced also in relation to the type of UCITS managed bythe management company. The direction of a management com-pany’s business must be decided by at least twoperso ns meetingthese conditions;
(1) OJ L 141, 11.6.1993, p. 1.
(Amendment 35)
ARTICLE 1(3)
Article 5a(3) (Directive 85/611/EEC)
3. An applicant shall be informed, within six months of the
submission of a complete application, whether or not authori-sation has been granted. Reasons shall be given whenever anauthorisation is refused.3. An applicant shall be informed, within six months of the
submission of a complete application, whether or not authori-sation has been granted. Reasons shall be given whenever anauthorisation is refused. After authorisation has been
refused in one Member State, it may not be applied forin another Member State. The parallel submission of appli-cations in more than one Member State shall not be per-mitted.
(Amendment 25)
ARTICLE 1(3)
Article 5f(1), 2nd subparagraph (Directive 85/611/EEC)
In particular, the competent authorities of the home Member
State having regard also to the nature of the UCITS managedby a management company, shall require that each such com-pany has sound administrative and accounting procedures,control and safeguard arrangements for electronic data proces-
sing and adequate internal control mechanisms ensuring, inter
alia, that the assets of the unit trusts/common funds or of theinvestment companies managed by the management companyare invested according to the fund rules or the instruments ofincorporation and the legal provisions in force.In particular, the competent authorities of the home Member
State, having regard also to the nature of the UCITS managedby a management company, shall require that each such com-pany has sound administrative and accounting procedures,control and safeguard arrangements for electronic data proces-
sing and adequate internal control mechanisms ensuring, inter
alia,that each transaction involving the fund may be
reconstructed according to its origin, the parties to it, itsnature, and the time and place at which it was effectedandthat the assets of the unit trusts/common funds or of the
investment companies managed by the management companyare invested according to the fund rules or the instruments ofincorporation and the legal provisions in force.
(Amendment 26)
ARTICLE 1(3)
Article 5f(2), 2nd subparagraph (new) (Directive 85/611/EEC)
The competent authorities of the home Member State
may, irrespective of a prior approval from the client of amanagement company, approve the activities of the man-agement company referred to in the above three indentsprovided that the provisions of Article 10(2) are compliedwith.29.11.2000 EN C 339/229 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 27)
ARTICLE 1(3)
Article 5g(1) and (2), introduction
and 1st and 2nd indents (Directive 85/611/EEC)
1.When a Member State permits a management company to
delegate to third parties, on the basis of specific mandates and forthe purpose of a more efficient conduct of the company’ s business,to carry out on its behalf one or more of the functions included inthe activity of collective portfolio management mentioned in Annex II,each mandate must be submitted to the competent authorities forprior approval.1.The competent authorities of the home Member
State may permit management companies to delegate spe-cific investment decisions to intermediaries that aresubject to prudential supervision, in accordance withinvestment-allocation criteria periodically laid down bythe management companies.
2. The competent authorities shall approve the mandate
only after having verified the compliance with the followingpre-conditions:2. The competent authorities shall approve the mandate
only after having verified the compliance with allthe following
pre-conditions:
vdash the mandate shall not prevent the effectiveness of supervi-
sion over the management company,vdash the mandate shall not prevent the effectiveness of supervi-
sion over the management company,
vdashin order to prevent conflicts of interest, the mandate shall not
be given to the depository and toperso ns having qualifying
holdings in the management company’ s or the depositary’ scapital or to any other person whose interests may conflict withthose of the management company or the unit-holders ,vdashwhere the mandate is given to a third-country inter-
mediary, cooperation between the prudential supervi-sory authorities must be ensured regarding the dele-gating party and the party delegated to act,
Wdash the mandate shall not be given to the depositary,
(Amendment 28)
ARTICLE 1(3)
Article 6a(4) (Directive 85/611/EEC)
4. Before the branch of a management company com-
mences business, the competent authorities of the host MemberState shall, within two months of receiving the informationreferred to in paragraph 2, prepare for the supervision of themanagement company and, if necessary, indicate the condi-tions, including the rules mentioned in Articles 44 and 45 inforce in the host Member State and the rules of conduct to berespected in the case of provision of the portfolio managementservice mentioned in Article 5(3), under which, in the interestof the general good, that business must be carried on in the
host Member State.4. Before the branch of a management company com-
mences business, the competent authorities of the host MemberState shall, within two months of receiving the informationreferred to in paragraph 2, prepare for the supervision of themanagement company and, if necessary, indicate the condi-tions, including the rules mentioned in Articles 44 and 45 inforce in the host Member State and the rules of conduct to berespected in the case of provision of the portfolio managementservice mentioned in Article 5(3) and of investment advisory
services and custody , under which, in the interest of the gen-
eral good, that business must be carried on in the host Member
State.
(Amendment 29)
ARTICLE 1(6)
Article 28(1) (Directive 85/611/EEC)
1. Both the simplified and the full prospectuses must include
the information necessary for investors to be able to make aninformed judgement of the investment proposed to them.1. Both the simplified and the full prospectuses must include
the information necessary for investors to be able to make aninformed judgement of the investment proposed to them and,
in particular, of the risks attached thereto.C 339/230 EN 29.11.2000 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 30)
ARTICLE 1(6)
Article 28 (1), 2nd subparagraph (new) (Directive 85/611/EEC)
The prospectuses must also include a clear and easily
understandable explanation of the fund’s riskprofile(independent of whether or not derivatives are used andindependent of the type of securities invested in).
(Amendment 31)
ARTICLE 1(7)
Article 29(2a) (new) (Directive 85/611/EEC)
2a. The provisions on rules of conduct to be observed
in connection with the sale of shares for investment pur-poses and on information concerning safeguard systemsset out in Articles 11 and 12 of the ISD shall apply mutatis
mutandis .
(Amendment 32)
ANNEX I, ‘Investment information’, 5th indent (new) (Directive 85/611/EEC)
Wdash a brief assessment of the fund’s riskprofile.
European Parliament legislative resolution on the proposal for a European Parliament and Council
directive amending Council Directive 85/611/EEC on the coordination of laws, regulations andadministrative provisions relating to undertakings for collective investment in transferable securi-ties (UCITS) with a view to regulating management companies and simplified prospectuses
(COM(1998) 451 Wdash C4-0465/1998 Wdash 1998/0242(COD))
(Codecision procedure: first reading)
The European Parliament,
vdash having regard to the Commission proposal to the European Parliament and the Council
(COM(1998)451) (
1),
vdash having regard to Article 251(2)of the EC Treaty and Article 47(2)of the EC Treaty, pursuant to which
the Commission submitted the proposal to Parliament (C4-0465/1998),
vdash having regard to Rule 67 of its Rules of Procedure,vdash having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of
the Committee on Legal Affairs and the Internal Market (A5-0025/2000),
1. Approves the Commission proposal as amended;
2. Asks to be consulted again should the Commission intend to amend its proposal substantially or
replace it with another text;
3. Instructs its President to forward its position to the Council and Commission.
(1)OJ C 272, 1.9.1998, p. 7.29.11.2000 EN C 339/231 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT