TEXTS ADOPTED
1. UCITS ***I
A5-0025/2000
I.
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) (COM(1998) 449 9dash C4-0464/1998 9dash
1998/0243(COD))
The proposal was amended as follows:
TEXT PROPOSED
BY THE COMMISSION (1)AMENDMENTS
BY PARLIAMENT
(Amendment 1)
Recital4
(4)Whereas money market instruments cover those classes of
transferable instruments which are normally dealt in on themoney market, for example treasury and local authority bills,certificates of deposit, commercial paper and bankers’ accep-tances;whereas Member States should have the option of choosing
thelistofeligiblemoney market instruments on thebasis ofobjectivecriteria to take account of the existing structural differences in themoney markets of different countries;(4)Whereas money market instruments cover those transfer-
able instruments which are normally dealt in on the moneymarket, for example treasury and local authority bills, certifi-cates of deposit, commercial paper and bankers’ acceptances;whereas it is necessary to ensure that the concept of regu-lated markets in this Directive corresponds to that inDirective 93/22/EEC(
1);
(1) OJ L 141, 11.6.1993, p. 27.
(Amendment 2)
Recital5
(5)Whereas it is desirable to permit a UCITS to invest its
assets in units of other collective investment undertakings ofthe open-ended type which also invest in transferable securitiesand which operate on the principle of risk-spreading; whereas
therequirementofrisk spreading forUCITSinvesting inothercollec-tive investment undertakings is indirectly respected since such UCITScan only invest in units issued by collective investment undertakingscomplying with the risk spreading criteria of Directive 85/611/EEC;whereas it is important that such UCITS adequately disclose toinvestors the fact that they invest in units of other collectiveinvestment undertakings;(5)Whereas it is desirable to permit a UCITS to invest its
assets in units of UCITS and other collective investment
undertakings of the open-ended type which also invest in trans-ferable securities and which operate on the principle of risk-spreading; whereas UCITS or other collective investment
undertakings in which a UCITS invests should also be sub-ject to effective supervision; whereas investments in unitsof UCITS and other collective investment undertakingsshould notresultin cascades of funds; whereas it is impor-
tant that such UCITS adequately disclose to investors the factthat they invest in units of other collective investment under-
takings;
(1)OJ C 280, 9.9.1998, p. 6.C 339/220 EN 29.11.2000 Official Journal of the European Communities
Thursday 17 February 2000
(Amendment 3)
Recital6
(6)Whereas to take market developments into account and in
consideration of the completion of the EMU it is desirable topermit UCITS to invest in bank deposits;(6)Whereas to take market developments into account and in
consideration of the completion of the EMU it is desirable topermit UCITS to invest in bank deposits; whereas to ensure
adequate liquidity of the investments in deposits theterms of these deposits should include a break clause;whereas, if the deposits are made with a credit institutionsituated in a non-Member State, the credit institutionshould be subject to effective supervision;
(Amendment 4)
Recital10
(10)Whereas new portfolio management techniques for col-
lective investment undertakings investing primarily in sharesare based on the replication of stock-indices; whereas it isdesirable to permit UCITS to replicate well known and recog-nised stock-indices; whereas therefore it is necessary to intro-duce more flexible risk-spreading rules for UCITS investing inshares; whereas in order to ensure transparency of the stock-indices which the Member States consider to be replicable byharmonised UCITS and a wide acceptance of such indices, it isdesirable to provide for adequate publication of the list ofreplicable stock-indices;(10)Whereas new portfolio management techniques for col-
lective investment undertakings investing primarily in sharesare based on the replication of stock-indices and/or indices
on debtsecurit ies ; whereas it is desirable to permit UCITS to
replicate well known and recognised stock-indices; whereastherefore it is necessary to introduce more flexible risk-spread-ing rules for UCITS investing in shares and/or debtsecurit ies ;
whereas in order to ensure transparency of the stock-indiceswhich the Member States consider to be replicable by harmo-nised UCITS and a wide acceptance of such indices, it is desir-able to provide for adequate publication of the list of replicablestock-indices and an indication about where updated infor-
mation can be obtained, possibly by electronic means ;
(Amendment 5)
Recital13a (new)
(13a) Whereas the development of opportunities for a
UCITS to invest in UCITS and other collective investmentundertakings should be facilitated; whereas it is thereforeessential to ensure that such investment activity does notreduce investor protection; whereas, taking into accountthe nature of investments in sufficiently diversified collec-
tive investment undertakings, it may be necessary to
restrict the possibility for a UCITS to combine its directinvestments in a liquid financial asset with the invest-ments made through these other collective investmentundertakings; whereas, because of the enhanced possibili-ties for UCITS to invest in units of other UCITS and col-lective investment undertakings, it is necessary to laydown certain rules on quantitative limits, disclosure ofinformation and prevention of the cascade phenomenon;29.11.2000 EN C 339/221 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 6)
Recital14a (new)
(14a) Whereas, for prudential reasons, a UCITS should,
whether its chosen investment policy is to invest in avariety of liquid financial assets or to specialise in a cer-tain category of such assets, avoid assuming an excessiveconcentration in liquid financial assets issued by and/ormade with a single body;
(Amendment 7)
Recital17a (new)
(17a) 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 8)
ARTICLE 1(1)
Article 1(2),1st indent (Directive 85/611/EEC)
’dash the sole object of which is the collective investment in
transferable securities and/or in other liquid financial assetsmentioned in Article 19 of this Directive of capital raised
from the public and which operate on the principle ofrisk-spreading;’dash the sole object of which is collective investment in trans-
ferable securities and/or in other liquid financial assetscovered by this Directive of capital raised from the public
and which operate on the principle of risk-spreading;
(Amendment 9)
ARTICLE 1(2a)(new)
Article 19(1)(a)(Directive 85/611/EEC)
2a. Article 19(1)(a) shall be replaced by the following:
(a) transferable securities admitted to or dealt in on a
regulated market within the meaning ofArticle 1(13) of Directive 93/22/EEC on invest-ment services in the securities field in a MemberState; and/or
(Amendment 44)
ARTICLE 1(3)
Article 19(1)(e)(Directive 85/611/EEC)
(e)units of other collective investment undertakings within
the meaning of the first and second indent of Article 1(2);and/or(e)units of UCITS and other collective investment undertak-
ings within the meaning of the first and second indent ofArticle 1(2) provided that:
9dash the other collective investment undertaking is
authorised under laws which provide that it issubject to supervision considered by the UCITS’competent authorities to be equivalent to thatlaid down by Community law, and cooperationbetween authorities is sufficiently ensured;C 339/222 EN 29.11.2000 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
9dash the level of protection for unitholders in the
other collective investment undertaking is equiva-lent to that provided for unit-holders in a UCITS,
and in particular that the rules on borrowing,
lending, uncovered sales of transferable securitiesand the role and the liability of the depositary laiddown by this Directive are respected;
9dash the business of the other collective investment
undertaking is reported in half-yearly and annualreports to enable an assessment to be made of theassets and liabilities, income and operations overthe reporting period;
9dash the other collective investment undertaking is,
according to its fund rules or instruments of
incorporation, not permitted to invest, in aggre-gate, more than 10% of its assets in units ofother UCITS or other collective investmentundertakings; and/or
(Amendment 11)
ARTICLE 1(3)
Article 19(1)(f)(Directive 85/611/EEC)
(f)deposits with credit institutions; and/or (f)deposits with credit institutions which are repayable on
demand or have the right to be withdrawn and matur-ing in no more than 12 months, provided that thecredit institution has its registered office in a MemberState or, if the registered office of the credit institu-tion is situated in a non-Member State, provided thatit is subject to prudential rules considered by the
UCITS competent authorities to be equivalent to
those laid down by Community law ; and/or
(Amendment 37)
ARTICLE 1(3)
Article 19(1)(g)and (h)(Directive 85/611/EEC)
(g)standardised financial-futures contracts , including equivalent
cash-settled instruments, dealt in on a regulated marketmentioned in the previous sub-paragraphs (b)and (c) ;and/or(g)financial derivative instruments , including equivalent
cash-settled instruments dealt in on a regulated marketmentioned in the previous sub-paragraphs (a), (b)and (c)
or dealt in over-the-counter (OTC), provided that thecounterparties to OTC transactions are institutionssubject to prudential supervision, and belonging tothe categories approved by the UCITS’ competentauthorities, and the instruments with a high ratingbased on a recognised rating scale are subject to reli-able and verifiable valuation and they can be sold orliquidated on a daily basis ; and/or
(h) standardised options to acquire or dispose of any instruments
falling within this Article, including equivalent cash-settledinstruments, dealt in on a regulated market mentioned in theprevious sub-paragraphs (b) and (c). This category includes, inparticular, options on currency and on interest rates; and/or(h) Deleted29.11.2000 EN C 339/223 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 13)
ARTICLE 1(3)
Article 19(1)(i),introduction (Directive 85/611/EEC)
(i)money market instruments whicharenot dealt in on a regu-
lated market, unless the issue of such instruments is itselfregulated for the purpose of protecting investors and sav-ings, and provided that they are:(i)money market instruments other than those dealt in on
a regulated market which fall under Article 1(8)(b) ,
unless the issue of such instruments is itself regulated forthe purpose of protecting investors and savings, and pro-vided that they are:
(Amendment 14)
ARTICLE 1(5)
Article 20 (Directive 85/611/EEC)
5. Article 20 shallbe deleted. Deleted
(Amendment 16)
ARTICLE 1(6)
Article 21(4),1st subparagraph (b) and 2nd subparagraph (Directive 85/611/EEC)
(b)in relation to each securities lending transaction appropri-
ate collateral shall be given covering the risk of default ofthe borrower. The value of collateral must be, during theentire period of the contract, at least equal to the totalvalue of the financial instruments lent.(b)in relation to each securities lending transaction, provided
they are not carried out by recognised security clear-ing houses and exchanges, appropriate collateral shall be
given to the UCITS covering the risk of default of the
borrower. The value of collateral must be, during theentire period of the contract, at least equal to the totalvalue of the financial instruments lent.
When a UCITS is permitted to conclude securities lending
transactions with the depositary which performs for thatUCITS the duties mentioned in Articles 7 and 14 of thisDirective, the competent authorities shall ensure that thecollateral is entrusted, during the entire period of the con-tract, with a third party custodian and that measures areundertaken preventing the depositary from using it.When a UCITS is permitted to conclude securities lending
transactions with the depositary which performs for thatUCITS the duties mentioned in Articles 7 and 14 of thisDirective, the competent authorities shall ensure that thecollateral is entrusted, during the entire period of the con-tract,to a blocked account, a security deposit or a
third-party custodian and that measures are undertakenpreventing the depositary from using it.
(Amendments 36 and 45)
ARTICLE 1(6a)(new)
Article 22(1a)(new)(Directive 85/611/EEC)
6a. In Article 22, the following paragraph shall be added:
1a. A UCITS may invest no more than 5% of its
assets at any time in transferable securities dealt in,over-the-counter derivatives and deposits made with
the same body.
In no case may the transferable securities dealt in,
over-the-counter derivatives and deposits made withbodies belonging to a single group at any timeaccount for more than 15% of the assets of UCITS.For the purposes of this rule, group shall includebodies linked by the relationship defined in Article 1of Directive 83/349/EEC(
1).
(1) OJ L 193, 18.7.1983, p. 31.C 339/224 EN 29.11.2000 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 42)
ARTICLE 1(6b)(new)
Article 22(3)(Directive 85/611/EEC)
6b. Article 22(3) shall be deleted.
(Amendment 39)
ARTICLE 1(6c) (new)
Article 22(3a)(new)(Directive 85/611/EEC)
6c. In Article 22, the following paragraph shall be added:
3a. A UCITS which has adequate risk management
controls may invest in financial derivative instru-ments, provided that investment in over-the-counterfinancial derivatives does not result in an overalldaily exposure measured by its mark to market valueexceeding 30% of its total assets.
(Amendment 18)
ARTICLE 1(7)
Article 22a (1)to (3)(Directive 85/611/EEC)
1. Without prejudice to the limits laid down in Article 25,
the Member States may raise the limits laid down in Article 22to a maximum of 35% for investment in shares issued by the
same body when, according to the fund rules or instruments ofincorporation, the aim of the UCITS’ investment policy is toreplicatethecomposition of a certain stock-index.1. Without prejudice to the limits laid down in Article 25,
the Member States may raise the limits laid down in Article 22to a maximum of 20% for investment in shares issued by the
same body when, according to the fund rules or instruments ofincorporation, the aim of the UCITS’ investment policy is toreplicate a certain recognised stock or debt securities
index on the following basis:
9dash its investment policy seeks to reflect the composition
of that index ;
2. Replicable stock indices shall be indices which Member States
consider to:
7dash have a composition which is sufficientlydiversified;
7dash be easy to replicate;’dash represent an adequate benchmark for the equity market to
whichtheyrefer ;9dash the index represents an adequate benchmark for the
market to which itrefers ;
’dashbepublished in an appropriate manner. 9dashi ti s published in an appropriate manner.
3. Each Member State shall send to the Commission the list
of stock-indices which they consider replicable by UCITS,together with details of the characteristics of such stock-indices.
A similar communication shall be effected in respect of each
change to the aforementioned list. The Commission shall pub-lish the complete list of replicable stock-indices and updatesthereto in the Official Journal of the European Communitiesat least once a year. This list may be subject to exchanges ofviews within the Contact Committee in accordance with theprocedure laid down in Article 53(4).2. Each Member State shall send to the Commission the list
of stock-indices which they consider replicable by UCITS,together with details of the characteristics of such stock-indices
and an indication about where updated information can
be obtained . A similar communication shall be effected in
respect of each change to the aforementioned list. The Commi-ssion shall publish the complete list of replicable stock-indicesand updates thereto in the Official Journal of the EuropeanCommunities at least once a year or make such information
publicly available in an appropriate manner. This list may
be subject to exchanges of views within the Contact Committeein accordance with the procedure laid down in Article 53(4).29.11.2000 EN C 339/225 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 19)
ARTICLE 1(8)
Article 24(1),(2)and (3)(Directive 85/611/EEC)
1. A UCITS may acquire the units of other collective invest-
ment undertakings within the meaning of the first and second
indent of Article 1(2) provided that it invests no more than 10%
if its own assets in units of a single UCITS.1. A UCITS may acquire the units of UCITS and other col-
lective investment undertakings mentioned in Article
19(1)(e) provided that no more than 10% of its assets are
invested in units of a single UCITS or other collective
investment undertaking. The Member States may raisethe limit to a maximum of 20%.
2. The Member States may raise the limit laid down in para-
graph 1 to a maximum of 35%. However, in that case the UCITSmust invest inatleastfivedifferentcollectiveinvestment undertakingsmentioned in paragraph 1.2.Investments made in units of collective investment
undertakings other than UCITS may not exceed, in aggre-gate, 30% of the assets of the UCITS.
The Member States may allow that, when a UCITS has
acquired units of UCITS or other collective investment
undertakings, the assets of the respective UCITS or othercollective investment undertaking do not have to be com-bined to the limits laid down in Article 22.
3. A UCITS may not invest inunitsofa collective investment
undertaking within the meaning of the first and second indent of
Article 1(2), which invests more than 10% of its own assets inunits of other collective investment undertakings.3. A UCITS may not invest in another UCITS or other
collective investment undertaking that invests itself morethan 10% in units of other UCITS or other collectiveinvestment undertakings.
3a. The UCITS’ fund rules or instruments of incorpora-
tion, its prospectuses and any promotional literature shallinclude a prominent statement drawing attention to thefact that the UCITS invests, as a part of its general invest-ment policy, in units of other UCITS and other collectiveinvestment undertakings.
(Amendment 20)
ARTICLE 1 (9)
Article 24a(1)and (2)(Directive 85/611/EEC)
1. Notwithstanding the provision laid down in Article 19(4),
aUCITS may invest its assets in deposits withcredit institutions fur-nishing sufficient financial and professional guarantees, provided thatthe UCITS places no more than 10% of its assets in deposits withthe same credit institution or with credit institution within the samegroup.Deleted
2. Member States may raise the limit laid down in paragraph 1
to a maximum of 35%. However, in thatcase a UCITS must investin deposits with at least five different credit institutions. For the pur-poses of this rule, credit institutions belonging to the same group areconsidered to be one single institution.C 339/226 EN 29.11.2000 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT
(Amendment 43)
ARTICLE 1(9)
Article 24b(1)(Directive 85/611/EEC)
1.Notwithstanding the provisions laid down in Article 21,
a UCITS may invest, as a part of its general investment policy,in financial-futures contracts and options mentioned in Article
19(1)(g) and (h), provided that the maximum potential exposure
relating to the conclusion of each such derivative transaction is cov-ered, during the entire period of the contract, by assets belonging tothe UCITS of theright kind and sufficient in value.1. A UCITS may invest, as a part of its general investment
policy, in financial derivatives, provided that the amount
of the commitments entered into by the UCITS is not
greater than the total net value of its assets. In calculating
the value of the commitments, reference must be made tothe current value of underlying activities.
(Amendment 21)
ARTICLE 1(16)
Article 53a, second indent (Directive 85/611/EEC)
7dash adaptation of theceilings referredto in Section V and in Article
36(2) in order to take account of developments on financialmarkets, where such adaptations willnot lead to stricter require-ments for theUCITS,Deleted
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) (COM(1998) 449 9dash C4-0464/1998 9dash 1998/0243(COD))
(Codecision procedure: first reading)
The European Parliament,
’dash having regard to the Commission proposal to the European Parliament and the Council
(COM(1998)449) (
1),
’dash 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 (C4-0464/1998),
’dash having regard to Rule 67 of its Rules of Procedure,’dash 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 280, 9.9.1998, p. 6.29.11.2000 EN C 339/227 Official Journal of the European Communities
Thursday 17 February 2000
TEXT PROPOSED
BY THE COMMISSIONAMENDMENTS
BY PARLIAMENT