Council Directive 88/220/EEC of 22 March 1988 amending, as regards the investment policies of certain UCITS, Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities (UCITS)
Date: 1988-03-22
Institutions: Council of the European Union
Subjects: approximation of laws, company structure, free movement of capital, investment company, securities













EUR-Lex - 31988L0220 - EN






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31988L0220

Council Directive 88/220/EEC of 22 March 1988 amending, as regards the investment policies of certain UCITS, Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities (UCITS)  


Official Journal L 100 , 19/04/1988 P. 0031 - 0032 Finnish special edition: Chapter 6 Volume 2 P. 0173  Swedish special edition: Chapter 6 Volume 2 P. 0173  





*****COUNCIL  DIRECTIVE  of 22 March 1988  amending, as regards the investment policies of certain UCITS, Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities (UCITS)  (88/220/EEC)  THE COUNCIL OF THE EUROPEAN COMMUNITIES,  Having regard to the Treaty establishing the European Economic Community, and in particular the third sentence of Article 57 (2) thereof,  Having regard to the proposal from the Commission (1),  In cooperation with the European Parliament (2),  Having regard to the opinion of the Economic and Social Committee (3),  Whereas Article 22 (1) and (2) of Directive 85/611/EEC (4) limits the investment of UCITS assets in transferable securities from the same issuer to 5 %, a limit which may, if required, be increased to 10 %;  Whereas that limit poses special problems for UCITS established in Denmark in cases where they wish to invest an appreciable proportion of their assets on the domestic bond market, since that market is dominated by mortgage credit bonds and the number of institutions issuing such bonds is very small;  Whereas those mortgage credit bonds are subject in Denmark to special rules and supervision designed to protect holders and are treated under Danish legislation as equivalent to bonds issued or guaranteed by the State;  Whereas Article 22 (3) of Directive 85/611/EEC derogates from paragraphs 1 and 2 of that Article in the case of bonds issued or guaranteed by a Member State and authorizes UCITS to invest in particular up to 35 % of their assets in such bonds;  Whereas a similar derogation, but of a more limited extent is justified with regard to private sector bonds which, even in the absence of a State guarantee, nevertheless offer special guarantees to the investor under the specific rules applicable thereto; whereas it is necessary therefore to extend such a derogation to the totality of such bonds which fulfil jointly fixed criteria, while leaving it to the Member States to draw up the list of bonds to which they intend, where appropriate, to grant a derogation, and providing for a procedure for informing the other Member States identical to that provided for in Article 20 of Directive 85/611/EEC,  HAS ADOPTED THIS DIRECTIVE:  Article 1  In Article 22 of Directive 85/611/EEC, the following paragraphs shall be added:  '4. Member States may raise the limit laid down in paragraph 1 to a maximum of 25 % in the case of certain bonds when these are issued by a credit institution which has its registered office in a Member State and is subject by law to special public supervision designed to protect bond-holders. In particular, sums deriving from the issue of these bonds  must be invested in conformity with the law in assets which, during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in the event of failure of the issuer, would be used on a priority basis for the reimbursement of the principal and payment of the accrued interest.  When a UCITS invests more than 5 % of its assets in the bonds referred to in the first subparagraph and issued by one issuer, the total value of these investments may not exceed 80 % of the value of the asserts of the UCITS.  As laid down in Article 20 (1), Member States shall send the Commission a list of the aforementioned categories of bonds together with the categories of issuers authorized, in accordance with the laws and supervisory arrangements mentioned in the first subparagraph, to issue bonds complying with the criteria set out above. A notice specifying the status of the guarantees offered shall be attached to these lists. The procedure laid down in Article 20 (2) shall apply.  5. The transferable securities referred to in paragraphs 3 and 4 shall not be taken into account for the purpose of applying the limit of 40 % referred 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 issued by the same body carried out in accordance with paragraphs 1, 2, 3 and 4 shall under no circumstances exceed in total 35 % of the assets of an UCITS.'  Article 2  The Member States shall bring into force the measures necessary to comply with this Directive by the same dates as those provided for in Directive 85/611/EEC. They shall forthwith inform the Commission thereof.  Article 3  This Directive is addressed to the Member States.  Done at Brussels, 22 March 1988.  For the Council  The President  M. BANGEMANN  (1) OJ No C 155, 21. 6. 1986, p. 4.  (2) Opinion published in OJ No C 125, 11. 5. 1987, p. 162 and Decision of 10 February 1988 (not yet published in the Official Journal).  (3) OJ No C 333, 29. 12. 1986, p. 10.  (4) OJ No L 375, 31. 12. 1985, p. 3.