20061223

P6_TA(2006)0567

Implementing Directive 85/611/EEC (UCITS III)

European Parliament resolution on the draft Commission directive implementing Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards the clarification of certain definitions

The European Parliament,

- having regard to Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) [1] (the UCITS-III Directive),

- having regard to the draft Commission directive of 13 September 2006 implementing Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards the clarification of certain definitions (working document ESC/43/2006) (the Draft Implementing Directive),

- having regard to the advice of the Committee on European Securities Regulators (the CESR) to the European Commission on Clarification of Definitions concerning Eligible Assets for Investments of UCITS of January 2006 [2],

- having regard to Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [3],

- having regard to the statement made by Romano Prodi, President of the European Commission, before the European Parliament on 5 February 2002 [4],

- having regard to its resolution of 5 February 2002 on the implementation of financial services legislation [5],

- having regard to its resolution of 27 April 2006 on asset management [6],

- having regard to Rule 81 of its Rules of Procedure,

A. whereas assets which are eligible for UCITS have so far been interpreted differently by the supervisory authorities in the Member States, which means that, in practice, different products have been offered as UCITS,

B. whereas a uniform, Europe-wide clarification of certain definitions of eligible assets is necessary in order to complete the single market,

1. Takes the view that a regulation, rather than a directive, is the best option to ensure the uniform, consistent and rapid transposition of the new definitions into national law; calls on the Commission to set out the reasons for preferring a directive and to examine whether its proposal for a directive can be transformed into a proposal for a regulation;

2. Emphasises that the CESR has made a valuable contribution to the drafting of new definitions of eligible assets for investments of UCITS and should therefore continue to be involved in its capacity as a so-called Level 3 group, particularly in order to ensure the consistency of the definitions clarified in the implementing measures in their day-to-day application; looks in this regard to CESR to issue a statement in the foreseeable future on whether Hedge Fund Indices are eligible assets; notes that Hedge Fund Indices must fulfil the basic criteria required to become eligible under UCITS III, such as sufficient diversification, the ability to serve as an adequate benchmark and appropriate publication;

Transferable securities

3. Stresses the importance of a presumption of liquidity in relation to the transferable securities, as referred to in Article 2(1) of the draft implementing directive, for the proper functioning of asset management activities, and calls on the Commission to make provision for the inclusion of this principle at the appropriate level;

Money market instruments

4. Calls on the Commission to extend the settlement period for money market instruments, which are normally traded on the money markets, from one year to a maximum of precisely 397 days, which will mean that money market instruments either have a maturity at issue of up to 397 days or have a residual maturity of up to 397 days or undergo regular yield adjustments in line with money market conditions at least every 397 days; points out in this regard that this amendment both takes into account Directive 2004/39/EC [7] and allows comparability with the rules of the US Financial Supervisory Authority;

Financial indices

5. Notes that the UCITS-III Directive fails to stipulate whether the financial indices may be based only on eligible assets or also on non-eligible assets and that Article 9 of the Draft Implementing Directive defines both categories as eligible assets, provided that all the criteria for diversification set out in Article 22a(1) of the UCITS-III Directive are met;

6. Points out that Article 9 of the Draft Implementing Directive is intended to allow Member States to raise the investment threshold for regulated markets in which certain financial market instruments and securities are very dominant (from 20 % to 35 %); considers that this means that Article 9 of the Draft Implementing Directive should refer not only to Article 22a(1), but also to Article 22a(2), of the UCITS-III Directive;

7. Understands that, in accordance with Article 9(1)(a)(iii) of the Draft Implementing Directive, investments in indices that are composed of assets not set out in Article 19(1) of the UCITS-III Directive shall be permissible; points out in this regard, however, that Article 9(1)(a)(iii) of the Draft Implementing Directive does not deal adequately with some of these indices, because Article 22a(1) of the UCITS-III Directive, to which it refers, establishes limitations only with regard to the issuers of shares or debt securities and does not cover indices where diversification does not depend on the type of issuer, such as commodity indices, where diversification depends on the type of commodity; calls on the Commission, therefore, to extend the scope of Article 9(1)(a)(iii) of the Draft Implementing Directive to the effect that, where an index is adequately captured by the UCITS risk management system, it shall be considered sufficiently diversified;

Asset-backed commercial papers

8. Takes the view that not only two-tier asset-backed commercial papers should be authorised as eligible assets, and calls, therefore, on the Commission, having due regard to the fourth indent of Article 19(1)(h) of the UCITS-III Directive, also to allow other asset-backed commercial papers as UCITS assets;

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9. Instructs its President to forward this resolution to the Council, the Commission and the CESR.

[1] OJ L 375, 31.12.1985, p. 3.

[2] CESR/06-005.

[3] OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/512/EC (OJ L 200, 22.7.2006, p. 11).

[4] SPEECH/02/44.

[5] OJ C 284 E, 21.11.2002, p. 115.

[6] Texts Adopted, P6_TA(2006)0181.

[7] Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ L 145, 30.4.2004, p. 1).

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