Directive 2001/107/EC of the European Parliament and of the Council of 21 January 2002 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
Date: 2002-01-21
Institutions: Council of the European Union, European Parliament
Subjects: approximation of laws, freedom to provide services, investment company, provision of services, right of establishment, securities

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DIRECTIVE 2001/107/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 21 January 2002
amending Council Directive 85/611/EEC on the coordination of laws, regulations and adminis-
trative provisions relating to undertakings for collective investment in transferable securities
(UCITS) with a view to regulating management companies and simplified prospectuses

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 47(2) thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the Economic and Social
Committee (2),

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

Whereas:

(1)

(2)

(3)

Council Directive 85/611/EEC of 20 December 1985 on
in transferable
undertakings for collective investment
securities (UCITS) (4), has already contributed signifi-
cantly to the achievement of the Single Market in this
field, laying down — for the first time in the financial
services sector — the principle of mutual recognition of
authorisation and other provisions which facilitate the
free circulation within the European Union of the units
of the collective investment undertakings (unit trusts/
common funds or as investment companies) covered by
that Directive.

However, Directive 85/611/EEC does not regulate to a
great extent
the companies which manage collective
investment undertakings (so-called ‘management compa-
nies’). In particular, Directive 85/611/EEC does not lay
down provisions ensuring in all Member States equiva-
lent market access rules and operating conditions for
such companies. Directive 85/611/EEC does not
lay
down provisions
establishment of
regulating
branches and the free provision of services by such
companies in Member States other than their home
Member State.

the

Authorisation granted in the management company's
home Member State should ensure investor protection
and the solvency of management companies, with a
view to contributing to the stability of the financial
system. The approach adopted is to ensure the essential
to secure the
harmonisation necessary and sufficient

(1) OJ C 272, 1.9.1998, p. 7 and

OJ C 311 E, 31.10.2000, p. 273.

(2) OJ C 116, 28.4.1999, p. 1.
(3) Opinion of the European Parliament of 17 February 2000 (OJ C
339, 29.11.2000, p. 228), Council Common Position of 5 June
2001 (OJ C 297, 23.10.2001, p. 10) and Decision of the European
Parliament of 23 October 2001. Council Decision of 4 December
2001.

(4) OJ L 375, 31.12.1985, p. 3. Directive as last amended by Directive
2000/64/EC of the European Parliament and the Council (OJ L 290,
17.11.2000, p. 27).

mutual recognition of authorisation and of prudential
supervision systems, making possible the grant of a
single authorisation valid throughout
the European
Union and the application of the home Member State
supervision.

(4)

(5)

(6)

It is necessary, for the protection of investors, to guar-
antee the internal overview of every management
company in particular by means of a two-man manage-
ment and by adequate internal control mechanisms.

In order to ensure that the management company will
be able to fulfil the obligations arising from its activities
and thus to ensure its stability,
initial capital and an
additional amount of own funds are required. To take
account of developments, particularly those pertaining
to capital charges on operational risk within the Euro-
pean Union and other international fora, these require-
ments, including the use of guarantees, will have to be
reviewed within three years.

By virtue of mutual recognition, management companies
authorised in their home Member States should be
permitted to carry on the services for which they have
received authorisation throughout the European Union
the freedom to
by establishing branches or under
provide services. The approval of
the fund rules of
common funds/unit trusts falls within the competence
of the management company's home Member State.

(7) With regard

the

companies),

the harmonised unit

to collective portfolio management
(management of unit trusts/common funds and invest-
authorisation granted to a
ment
management company authorised in its home Member
State should permit the company to carry on in host
Member States the following activities: to distribute the
units of
trusts/common funds
managed by the company in its home Member State; to
distribute the shares of
the harmonised investment
companies, managed by such a company; to perform all
the other functions and tasks included in the activity of
collective portfolio management; to manage the assets of
investment companies incorporated in Member States
other than its home Member State; to perform, on the
basis of mandates, on behalf of management companies
incorporated in Member States other than its home
Member State, the functions included in the activity of
collective portfolio management.

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(8)

(9)

such as

The principles of mutual recognition and of home
Member State supervision require that
the Member
States' competent authorities should not grant or should
withdraw authorisation where factors,
the
content of programmes of operations, the geographical
distribution or the activities actually carried on indicate
clearly that a management company has opted for the
legal system of one Member State for the purpose of
evading the stricter
in force in another
standards
Member State within the territory of which it intends to
carry on or does carry on the greater part of its activi-
ties. For the purpose of this Directive, a management
company should be authorised in the Member State in
which it has its registered office. In accordance with the
principle of the home country control, only the Member
State in which the management company has its regis-
tered office can be considered competent to approve the
fund rules of unit trusts/common funds set up by such a
company and the choice of the depositary. In order to
prevent supervisory arbitrage and to promote confidence
in the effectiveness of supervision by the home Member
State authorities, a requirement for authorisation of a
UCITS should be that it should not be prevented in any
legal way from being marketed in its home Member
State. This does not affect the free decision, once the
UCITS has been authorised,
to choose the Member
State(s) where the units of the UCITS are to be marketed
in accordance with this Directive.

Directive 85/611/EEC limits the scope of management
companies to the sole activity of management of unit
trusts/common funds and of
investment companies
(collective portfolio management). In order to take into
account recent developments in national legislation of
Member States and to permit such companies to achieve
important economies of scale, it is desirable to revise
this restriction. It is therefore desirable to permit such
companies to carry out also the activity of management
of portfolios of investments on a client-by-client basis
(individual
the
management of pension funds as well as some specific
non-core activities linked to the main business. Such an
extension of the scope of the activity of the management
company would not prejudge the stability of such
companies. However, specific rules should be introduced
preventing conflicts of
interest when management
companies are authorised to carry on both the business
of collective and individual portfolio management.

portfolio management)

including

(10)

The activity of management of portfolios of investments
is an investment service already covered by Council
Directive 93/22/EEC of 10 May 1993 on investment
services in the securities field (1). In order to ensure a
homogeneous regulatory framework in this area,
it is
desirable to subject management companies, the author-
isation of which also covers that service, to the oper-
ating conditions laid down in that Directive.

(11) A home Member State may, as a general rule, establish
rules stricter than those laid down in this Directive, in
particular as regards authorisation conditions, prudential

(1) OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive

2000/64/EC.

requirements and the rules on reporting and the full
prospectus.

(12)

its business.

the authorisation and of

It is desirable to lay down rules defining the precondi-
tions under which a management company may dele-
gate, on the basis of mandates, specific tasks and func-
tions to third parties so as to increase the efficiency of
the conduct of
In order to ensure the
correct functioning of the principles of mutual recogni-
tion of
the home country
control, Member States permitting such delegations
should ensure that the management company to which
they granted an authorisation does not delegate globally
its functions to one or more third parties, so as to
become a letter box entity, and the existence of
mandates does not hinder an effective supervision over
the management company. However, the fact that the
management company has delegated its own functions
should in no case affect the liabilities of that company
and of the depositary vis-à-vis the unit holders and the
competent authorities.

(13)

To safeguard shareholders' interests and to secure a level
playing field in the market for harmonised collective
investment undertakings, an initial capital is required for
investment companies. However, investment companies
which have designated a management company will be
covered through the management company's additional
amount of own funds.

investment

companies,

(14) Articles 5g and 5h should always be complied with by
authorised
the
company directly according to Article 13b or indirectly,
due to the fact that if an authorised investment company
chooses to designate a management company,
that
management company should be authorised in accord-
ance with the Directive and thus obliged to comply with
Articles 5g and 5h.

either

by

(15)

To take into account developments of information tech-
niques, it is desirable to revise the current information
framework provided for in Directive 85/611/EEC.
In
particular, it is desirable to introduce, in addition to the
existing full prospectus, a new type of prospectus for
UCITS (simplified prospectus). Such a new prospectus
should be designed to be investor-friendly and should
therefore represent a source of valuable information for
the average investor. Such a prospectus should give key
information about the UCITS in a clear, concise and
easily understandable way. However, the investor should
always be informed, by an appropriate statement to be
included in the simplified prospectus, that more detailed
information is contained in the full prospectus and in
the UCITS' yearly and half-yearly report, which can be
obtained free of charge at his/her request. The simplified
prospectus should always be offered free of charge to
subscribers before the conclusion of the contract. This
should be a sufficient precondition to meet the legal
obligation under this Directive to provide information to
subscribers before the conclusion of the contract.

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(16)

in the financial

There is a need to ensure a level playing field among
intermediaries
services area when
providing the same services and to ensure a harmonised
minimum degree of investor protection. A harmonised
minimum degree of harmonisation of the conditions for
taking up business and operating conditions represents
the essential precondition for achieving the internal
market for these operators. Therefore, only a binding
Community Directive laying down agreed minimum
standards in this respect can achieve the desired objec-
tives. This Directive effects only the minimum harmoni-
sation required, and does not go beyond what is neces-
sary in order to achieve the objectives pursued in
accordance with the third paragraph of Article 5 of the
Treaty.

(17)

The Commission may consider proposing codification in
due time after adoption of the proposals,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 85/611/EEC is hereby amended as follows:

1. the following Article 1a shall be inserted:

‘Article 1a

For the purposes of this Directive:

1. “depositary” shall mean any institution entrusted with
the duties mentioned in Articles 7 and 14 and subject
to the other provisions laid down in Sections IIIa and
IVa;

2. “management company” shall mean any company, the
regular business of which is the management of
UCITS in the form of unit
trusts/common funds
and/or of investment companies (collective portfolio
management of UCITS); this includes the functions
mentioned in Annex II;

3. a “management company's home Member State” shall
mean the Member State, in which the management
company's registered office is situated;

4. a “management company's host Member State” shall
mean the Member State, other than the home Member
State, within the territory of which a management
company has a branch or provides services;

5. a “UCITS home Member State” shall mean:

(a) with regard to a UCITS constituted as unit trust/
common fund, the Member State in which the
management company's registered office is situ-
ated,

(b) with regard to a UCITS constituted as investment
company, the Member State in which the invest-
ment company's registered office is situated;

6. a “UCITS host Member State” shall mean the Member
State, other than the UCITS home Member State, in
which the units of the common fund/unit trust or of
the investment company are marketed;

7. “branch” shall mean a place of business which is a
part of the management company, which has no legal
personality and which provides the services for which
the management company has been authorised; all the
places of business set up in the same Member State by
a management company with headquarters in another
Member State shall be regarded as a single branch;

8. “competent authorities” shall mean the authorities
which each Member State designates under Article 49
of this Directive;

9. “close links” shall mean a situation as defined in

Article 2(1) of Directive 95/26/EC (*);

10. “qualifying holdings” shall mean any direct or indirect
holding in a management company which represents
10 % or more of the capital or of the voting rights or
which makes it possible to exercise a significant influ-
ence over
the management
company in which that holding subsists.

the management of

For the purpose of this definition, the voting rights
referred to in Article 7 of Directive 88/627/EEC (**)
shall be taken into account;

11. “ISD” shall mean Council Directive 93/22/EEC of 10
May 1993 on investment services in the securities
field (***);

12. “parent undertaking” shall mean a parent undertaking
as defined in Articles 1 and 2 of Directive 83/
349/EEC (****);

13. “subsidiary” shall mean a subsidiary undertaking as
defined in Articles 1 and 2 of Directive 83/349/EEC;
any subsidiary of a subsidiary undertaking shall also
be regarded as a subsidiary of the parent undertaking
which is the ultimate parent of those undertakings;

14. “initial capital” shall mean capital as defined in items 1
and 2 of Article 34(2) of Directive 2000/12/EC (*****);

15. “own funds” shall mean own funds as defined in Title
V, Chapter 2, Section 1 of Directive 2000/12/EC; this
definition may, however, be amended in the circum-
stances described in Annex V of Directive 93/
6/EEC (******).

(*) OJ L 168, 18.7.1995, p. 7.
(**) OJ L 348, 17.12.1988, p. 62.
(***) OJ L 141, 11.6.1993, p. 27. Directive as

last
amended by Directive 2000/64/EC (OJ L 290,
17.11.2000, p. 27).

(****) OJ L 193, 18.7.1983, p. 1. Directive as
amended by the 1994 Act of Accession.

last

(*****) OJ L 126, 26.5.2000, p. 1. Directive as amended
by Directive 2000/28/EC of the European Parlia-
ment and of the Council (OJ L 275, 27.10.2000,
p. 37).

(******) OJ L 141, 11.6.1993, p. 1. Directive as last
amended by Directive 98/33/EC of the European
Parliament and of
(OJ L 204,
21.7.1998, p. 29).’;

the Council

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2. Article 4(3) shall be replaced by the following:

‘3.
The competent authorities may not authorise a
UCITS if the management company or the investment
company do not comply with the preconditions laid
in Sections III and IV respec-
down in this Directive,
tively.

Moreover the competent authorities may not authorise a
UCITS if the directors of the depositary are not of suffi-
ciently good repute or are not sufficiently experienced
also in relation to the type of UCITS to be managed. To
that end, the names of the directors of the depositary
and of every person succeeding them in office must be
communicated forthwith to the competent authorities.

(a) management of portfolios of investments,

including
those owned by pension funds,
in accordance with
mandates given by investors on a discretionary,
client-by-client basis, where such portfolios include
one or more of the instruments listed in Section B
of the Annex to the ISD,

(b) as non-core services:

— investment advice concerning one or more of the
instruments listed in Section B of the Annex to
the ISD,

— safekeeping and administration in relation to
units of collective investment undertakings.

the

Directors shall mean those persons who, under the law
or
the
depositary, or who effectively determine the policy of
the depositary.

instruments of

incorporation,

represent

this Directive

Management companies may in no case be authorised
under
services
mentioned in this paragraph or to provide non-core
services without being authorised for the service referred
to in point (a).

to provide only the

3a.
The competent authorities shall not grant author-
isation if the UCITS is legally prevented (e.g. through a
provision in the fund rules or instruments of incorpora-
from marketing its units or shares in its home
tion)
Member State.’;

Article 2(4), Article 8(2), Articles 10, 11 and 13 of
4.
the services
the ISD shall apply to the provision of
mentioned in paragraph 3 of this Article by manage-
ment companies.

3. the title of Section III and Articles 5 and 6 shall be

replaced by the following:

Article 5a

‘SECTION III

Obligations regarding management companies

T i t l e A

Conditions for taking up business

Article 5

1.
Access to the business of management companies
is subject to prior official authorisation to be granted by
the home Member State's competent authorities. Author-
isation granted under this Directive to a management
company shall be valid for all Member States.

than the management of UCITS

No management company may engage in activities
2.
other
authorised
according to this Directive except the additional manage-
ment of other collective investment undertakings which
are not covered by this Directive and for which the
management company is subject
to prudential super-
vision but which cannot be marketed in other Member
States under this Directive.

The activity of management of unit
funds and of
purpose of
Annex II which are not exhaustive.

trusts/common
for the
the functions mentioned in

investment companies includes,

this Directive,

3.
By way of derogation from paragraph 2, Member
States may authorise management companies to provide,
in addition to the management of unit trusts/common
funds
following
services:

companies,

investment

and of

the

1. Without prejudice to other conditions of general
application laid down by national
the competent
authorities shall not grant authorisation to a manage-
ment company unless:

law,

(a) the management company has an initial capital of at

least EUR 125 000:

company

shall be

— When the value of the portfolios of the manage-
the
ment company, exceeds EUR 250 000 000,
management
required to
provide an additional amount of own funds. This
additional amount of own funds shall be equal
to 0,02 % of the amount by which the value of
the portfolios of
company
exceeds EUR 250 000 000. The required total of
the initial capital and the additional amount shall
not, however, exceed EUR 10 000 000.

the management

— For the purpose of this paragraph, the following
portfolios shall be deemed to be the portfolios of
the management company:

(i) unit

trusts/common funds managed by the
management company including portfolios
for which it has delegated the management
function but excluding portfolios that
is
managing under delegation;

it

(ii) investment

companies
management
company
management company;

for which
is

the
the designated

(iii) other

collective
by

investment
the management

undertakings
managed
company
including portfolios for which it has dele-
but
gated
excluding portfolios
is managing
under delegation.

the management
that

function

it

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— Irrespective of the amount of these requirements,
the own funds of
the management company
shall never be less than the amount prescribed in
Annex IV of Directive 93/6/EEC.

— Member

States may

to provide up to 50 % of

authorise management
companies not
the
additional amount of own funds referred to in
the first indent if they benefit from a guarantee
of the same amount given by a credit institution
or an insurance undertaking. The credit institu-
tion or
insurance undertaking must have its
registered office in a Member State, or in a non-
Member State provided that
to
rules considered by the competent
prudential
to those laid down in
authorities as equivalent
Community law.

subject

is

it

— No later than 13 February 2005, the Commis-
sion shall present a report
to the European
Parliament and the Council on the application of
this
accompanied where
requirement,
appropriate by proposals for its revision;

capital

(b) the persons who effectively conduct the business of
a management company are of
sufficiently good
repute and are sufficiently experienced also in rela-
tion to the type of UCITS managed by the manage-
ment company. To that end,
these
persons and of every person succeeding them in
office must be
communicated forthwith to the
competent authorities. The conduct of a manage-
ment company's business must be decided by at
least two persons meeting such conditions;

the names of

(c) the application for authorisation is accompanied by
a programme of activity setting out,
inter alia, the
organisational structure ofhe management company;

(d) both its head office and its registered office are

located in the same Member State.

company

2. Moreover where close links exist between the
management
legal
persons,
the competent authorities shall grant author-
isation only if those do not prevent the effective exer-
cise of their supervisory functions.

and other natural or

A management company may start business as

4.
soon as authorisation has been granted.

The

competent

5.
authorities may withdraw the
authorisation issued to a management company subject
to this Directive only where that company:

(a) does not make use of the authorisation within 12
months, expressly renounces the authorisation or has
ceased the activity covered by this Directive more
than six months previously unless the Member State
concerned has provided for authorisation to lapse in
such cases;

(b) has obtained the authorisation by making false state-

ments or by any other irregular means;

(c) no longer fulfils the conditions under which author-

isation was granted;

(d) no longer complies with Directive 93/6/EEC if

its
authorisation also covers the discretionary portfolio
management service referred to in Article 5(3)(a) of
this Directive;

(e) has

seriously and/or

systematically infringed the

provisions adopted pursuant to this Directive; or

(f) falls within any of

the cases where national

law

provides for withdrawal.

Article 5b

1.
The competent authorities shall not grant author-
isation to take up the business of management compa-
nies until they have been informed of the identities of
the shareholders or members, whether direct or indirect,
natural or legal persons, that have qualifying holdings
and of the amounts of those holdings.

The competent authorities shall refuse authorisation if,
taking into account the need to ensure the sound and
prudent management of a management company, they
are not
the afore-
mentioned shareholders or members.

to the suitability of

satisfied as

The competent authorities shall also refuse authorisation
if the laws, regulations or administrative provisions of a
non-member country governing one or more natural or
legal persons with which the management company has
close links, or difficulties involved in their enforcement,
prevent the effective exercise of their supervisory func-
tions.

The competent authorities
require management
companies to provide them with the information they
require to monitor compliance with the conditions
referred to in this paragraph on a continuous basis.

shall

In the case of branches of management companies
2.
that have registered offices outside the European Union
and are starting or carrying on business,
the Member
States shall not apply provisions that result in treatment
more favourable than that accorded to branches of
management companies that have registered offices in
Member States.

The competent authorities of

3.
the other Member
State involved shall be consulted beforehand on the
authorisation of any management company which is:

(a) a subsidiary of another management company, an
investment firm, a credit institution or an insurance
undertaking authorised in another Member State,

3.
An applicant shall be informed, within six months
of the submission of a complete application, whether or
not authorisation has been granted. Reasons shall be
given whenever an authorisation is refused.

(b) a subsidiary of

the parent undertaking of another
management company, an investment firm, a credit
institution or an insurance undertaking authorised in
another Member State, or

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(c) controlled by the same natural or legal persons as
control another management company, an invest-
ment
institution or an insurance
undertaking authorised in another Member State.

firm, a credit

T i t l e B

Relations with third countries

Article 5c

1.
Relations with third countries shall be regulated in
accordance with the relevant rules laid down in Article
7 of the ISD.

firm” and “investment

For the purpose of this Directive, the expressions “firm/
investment
firms” contained in
Article 7 of the ISD shall be construed respectively as
“management company” and “management companies”;
the expression “providing investment services” in Article
7(2) of
“providing
services”.

ISD shall be

construed as

the

2.
The Member States shall also inform the Commis-
sion of any general difficulties which UCITS encounter
in marketing their units in any third country.

T i t l e C

Operating conditions

Article 5d

The

competent authorities of

1.
the management
company's home Member State shall require that
the
authorised
company which they have
management
complies at all times with the conditions laid down in
Article 5 and Article 5a(1) and (2) of this Directive. The
own funds of a management company may not
fall
below the level specified in Article 5a(1)(a). If they do,
the competent authorities may, where the
however,
circumstances
justify it, allow such firms a limited
period in which to rectify their situations or cease their
activities.

supervision of

The prudential

the home Member State, whether

a management
2.
the competent
company shall be the responsibility of
authorities of
the
management company establishes a branch or provides
services in another Member State or not, without preju-
dice to those provisions of
this Directive which give
responsibility to the authorities of the host country.

Article 5f

1.
Each home Member State shall draw up prudential
rules which management companies, with regard to the
activity of management of UCITS authorised according
to this Directive, shall observe at all times.

the competent authorities of

In particular,
the home
Member State having regard also to the nature of the
UCITS managed by a management
shall
require that each such company:

company,

rules

including,

(a) has sound administrative and accounting procedures,
control and safeguard arrangements for electronic
data processing and adequate internal control mecha-
nisms
for personal
in particular,
transactions by its employees or for the holding or
instruments
management of investments in financial
in order to invest own funds and ensuring, inter alia,
that each transaction involving the fund may be
reconstructed according to its origin, the parties to
it, its nature, and the time and place at which it was
trusts/
the assets of
effected and that
common funds or of
the investment companies
managed by the management company are invested
according to the fund rules or the instruments of
incorporation and the legal provisions in force;

the unit

(b) is structured and organised in such a way as to
minimise the risk of UCITS' or clients'
interests
being prejudiced by conflicts of interest between the
company and its clients, between one of its clients
and another, between one of its clients and a UCITS
or between two UCITS. Nevertheless, where a branch
is set up, the organisational arrangements may not
conflict with the rules of conduct laid down by the
host Member State to cover conflicts of interest.

2.
Each management company the authorisation of
which also covers the discretionary portfolio manage-
ment service mentioned in Article 5(3)(a):

— shall not be permitted to invest all or a part of the
investor's portfolio in units of unit
trusts/common
funds or of investment companies it manages, unless
it receives prior general approval from the client,

— shall be subject with regard to the services referred
to in Article 5(3)
to the provisions laid down in
Directive 97/9/EC of the European Parliament and of
the Council of 3 March 1997 on investor-compensa-
tion schemes (*).

Article 5e

Article 5g

Qualifying holdings

1.
companies
shall be subject to the same rules as those laid down in
Article 9 of the ISD.

in management

2.
For the purpose of this Directive, the expressions
“firm/investment firm” and “investment firms” contained
in Article 9 of the ISD shall be construed respectively as
“management company” and “management companies”.

1.
If Member States permit management companies
to delegate to third parties for the purpose of a more
efficient conduct of the companies' business to carry out
on their behalf one or more of their own functions the
following preconditions have to be complied with:

(a) the competent authority must be informed in an

appropriate manner;

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(b) the mandate shall not prevent

the effectiveness of
supervision over the management company, and in
particular
the management
company from acting, or
the UCITS from being
managed,

in the best interests of its investors;

it must not prevent

(c) when

the

the

concerns

delegation
investment
management,
the mandate may only be given to
undertakings which are authorised or registered for
to
the purpose of asset management and subject
prudential supervision;
the delegation must be in
accordance with investment-allocation criteria period-
ically laid down by the management companies;

(d) where the mandate concerns the investment manage-
ment and is given to a third-country undertaking,
cooperation between the
authorities
concerned must be ensured;

supervisory

(e) a mandate with regard to the core function of
investment management shall not be given to the
depositary or to any other undertaking whose inter-
ests may conflict with those of
the management
company or the unit-holders;

(f) measures shall exist which enable the persons who
conduct the business of the management company
to monitor effectively at any time the activity of the
undertaking to which the mandate is given;

(g) the mandate shall not prevent

the persons who
conduct the business of the management company
to give at any time further instructions to the under-
taking to which functions are delegated and to with-
draw the mandate with immediate effect when this
is in the interest of investors;

(h) having regard to the nature of the functions to be
delegated, the undertaking to which functions will be
delegated must be qualified and capable of under-
taking the functions in question, and

(i) the UCITS' prospectuses list the functions which the
management company has been permitted to dele-
gate.

In no case shall the management company's and
2.
the depositary's liability be affected by the fact that the
management company delegated any functions to third
parties, nor shall the management company delegate its
functions to the extent
it becomes a letter box
that
entity.

Article 5h

Each Member State shall draw up rules of conduct
which management
that
companies
Member State shall observe at all times. Such rules must
implement
in the
following indents. These principles shall ensure that a
management company:

the principles

authorised

set out

least

in

at

(a) acts honestly and fairly in conducting its business
the UCITS it

activities
manages and the integrity of the market;

in the best

interests of

(b) acts with due skill, care and diligence,

in the best
interests of the UCITS it manages and the integrity
of the market;

(c) has

and employs

for
procedures
performance of its business activities;

that

effectively
are necessary

the

resources

and
the proper

(d) tries to avoid conflicts of interests and, when they
the UCITS it

that

cannot be
ensures
manages are fairly treated, and

avoided,

(e) complies with all regulatory requirements applicable
to the conduct of
its business activities so as to
promote the best interests of its investors and the
integrity of the market.

T i t l e D

The right of establishment and the freedom to provide
services

Article 6

1. Member States shall ensure that a management
company, authorised in accordance with this Directive
by the competent authorities of another Member State,
may carry on within their territories the activity for
which it has been authorised, either by the establish-
ment of a branch or under the freedom to provide
services.

2. Member States may not make the establishment of
a branch or the provision of the services subject to any
authorisation
to
provide endowment capital or to any other measure
having equivalent effect.

requirement,

requirement

any

to

Article 6a

1.
In addition to meeting the conditions imposed in
Articles 5 and 5a, any management company wishing to
establish a branch within the
another
Member State shall notify the competent authorities of
its home Member State.

territory of

shall

2. Member States
require every management
company wishing to establish a branch within the terri-
tory of another Member State to provide the following
information and documents, when effecting the noti-
fication provided for in paragraph 1:

(a) the Member State within the territory of which the
management company plans to establish a branch;

(b) a programme of operations setting out the activities
and services according to Article 5(2) and (3) envis-
aged and the organisational structure of the branch;

(c) the address in the host Member State from which

documents may be obtained;

(d) the names of those responsible for the management

of the branch.

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Unless

the home
the competent authorities of
3.
Member State have reason to doubt the adequacy of the
administrative structure or the financial situation of a
management company, taking into account the activities
envisaged, they shall, within three months of receiving
all the information referred to in paragraph 2, commu-
nicate that information to the competent authorities of
the host Member State and shall
inform the manage-
ment company accordingly. They shall also communi-
cate details of any compensation scheme intended to
protect investors.

Where the competent authorities of the home Member
State refuse to communicate the information referred to
in paragraph 2 to the competent authorities of the host
Member State, they shall give reasons for their refusal to
the management
two
months of receiving all the information. That refusal or
failure to reply shall be subject to the right to apply to
the courts in the home Member State.

concerned within

company

indicate

Before the branch of a management company
4.
starts business,
the host
the competent authorities of
Member State shall, within two months of receiving the
information referred to in paragraph 2, prepare for the
supervision of the management company and,
if neces-
rules
conditions,
sary,
mentioned in Articles 44 and 45 in force in the host
Member State and the rules of conduct to be respected
in the case of provision of the portfolio management
investment
service mentioned in Article 5(3) and of
advisory services and custody, under which,
in the
interest of
that business must be
carried on in the host Member State.

the general good,

including

the

the

a

of

On

receipt

receipt of

communication

5.
from the
competent authorities of the host Member State or on
the expiry of the period provided for in paragraph 4
any communication from those
without
authorities,
the branch may be established and start
business. From that moment the management company
may also begin distributing the units of the unit trusts/
common funds and of the investment companies subject
to this Directive which it manages, unless the competent
authorities of
in a
reasoned decision taken before the expiry of that period
of
communicated to the
competent authorities of the home Member State – that
the arrangements made for the marketing of the units
do not comply with the provisions referred to in Article
44(1) and Article 45.

the host Member State establish,

two months — to be

6.
In the event of change of any particulars commu-
nicated in accordance with paragraphs 2(b), (c) or (d), a
management company shall give written notice of that
change to the competent authorities of the home and
host Member States at least one month before imple-
menting the change so that the competent authorities of
the home Member State may take a decision on the
change under paragraph 3 and the competent authori-
ties of the host Member State may do so under para-
graph 4.

a

change

In the

event of

in the particulars
7.
communicated in accordance with the first subparagraph
of paragraph 3,
the home Member
State shall
inform the authorities of the host Member
State accordingly.

the authorities of

Article 6b

1.
Any management company wishing to carry on
business within the territory of another Member State
for the first time under the freedom to provide services
shall communicate the following information to the
competent authorities of its home Member State:

(a) the Member State within the territory of which the

management company intends to operate;

(b) a programme of operations stating the activities and
services referred to in Article 5(2) and (3) envisaged.

The competent authorities of

2.
the home Member
State shall, within one month of receiving the informa-
tion referred to in paragraph 1,
to the
competent authorities of the host Member State.

forward it

They shall also communicate details of any applicable
compensation scheme intended to protect investors.

3.
The management company may then start business
in the host Member State notwithstanding the provi-
sions of Article 46.

the

When appropriate, the competent authorities of the host
Member State
information
shall, on receipt of
referred to in paragraph 1, indicate to the management
company the conditions, including the rules of conduct
to be respected in the case of provision of the portfolio
management service mentioned in Article 5(3) and of
investment advisory services and custody, with which, in
the
the management
the general good,
company must comply in the host Member State.

interest of

4.
Should the content of the information communi-
cated in accordance with paragraph 1(b) be amended,
the management company shall give notice of
the
amendment in writing to the competent authorities of
the home Member State and of the host Member State
before implementing the change, so that the competent
authorities of the host Member State may,
if necessary,
inform the company of any change or addition to be
made to the information communicated under para-
graph 3.

5.
A management company shall also be subject to
the notification procedure laid down in this Article in
cases where it entrusts a third party with the marketing
of the units in a host Member State.

Article 6c

1.
Host Member States may, for statistical purposes,
require all management companies with branches within
their territories to report periodically on their activities
in those host Member States to the competent authori-
ties of those host Member States.

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In discharging their

this
2.
Directive, host Member States may require branches of
management companies to provide the same particulars
as national management companies for that purpose.

responsibilities under

Host Member States may require management compa-
nies, carrying on business within their territories under
the freedom to provide services, to provide the informa-
tion necessary for the monitoring of their compliance
with the standards set by the host Member State that
apply to them, although those requirements may not be
more stringent
than those which the same Member
State imposes on established management companies for
their compliance with the same
the monitoring of
standards.

Any measure adopted pursuant to paragraphs 4, 5
7.
or 6 involving penalties or restrictions on the activities
of a management company must be properly justified
and
company
concerned. Every such measure shall be subject to the
right to apply to the courts in the Member State which
adopted it.

the management

communicated

to

in emergencies,

8.
Before following the procedure laid down in para-
graphs 3, 4 or 5 the competent authorities of the host
take any precau-
Member State may,
tionary measures necessary to protect
the interests of
investors and others for whom services are provided.
The Commission and the competent authorities of the
other Member States concerned must be informed of
such measures at the earliest opportunity.

the

competent

authorities of

a host
3. Where
Member State ascertain that a management company
that has a branch or provides services within its terri-
tory is in breach of the legal or regulatory provisions
adopted in that State pursuant
to those provisions of
this Directive which confer powers on the host Member
State's
shall
require the management company concerned to put an
end to its irregular situation.

authorities,

competent

authorities

those

If

the management company concerned fails to
4.
the competent authorities of
take the necessary steps,
the host Member State shall
inform the competent
authorities of the home Member State accordingly. The
latter shall, at the earliest opportunity, take all appro-
priate measures
the management
company concerned puts an end to its irregular situa-
tion. The nature of those measures shall be communi-
cated to the competent authorities of the host Member
State.

ensure

that

to

If, despite

the measures

taken by the home
5.
Member State or because such measures prove inade-
quate or are not available in the Member State in ques-
tion, the management company persists in breaching the
legal or regulatory provisions referred to in paragraph 2
in force in the host Member State, the latter may, after
informing the
the home
Member State, take appropriate measures to prevent or
insofar as neces-
to penalise further irregularities and,
from
that management
sary,
initiating any further transaction within its territory. The
Member States shall ensure that within their territories it
is possible to serve the legal documents necessary for
those measures on management companies.

authorities of

to prevent

competent

company

The

affect

shall not

foregoing provisions

6.
the
powers of host Member States to take appropriate meas-
ures to prevent or to penalise irregularities committed
within their territories which are contrary to legal or
regulatory provisions adopted in the interest of
the
the possibility of
general good. This
preventing
from
initiating any further transactions within their territories.

shall
include
offending management

companies

the

consulting

After
the
Member States concerned, the Commission may decide
the Member State in question must amend or
that
abolish those measures.

authorities of

competent

In the event of

the withdrawal of authorisation,
9.
the host Member State
the competent authorities of
shall be informed and shall take appropriate measures
to prevent
the management company concerned from
initiating any further transactions within its territory and
to safeguard investors'
interests. Every two years the
Commission shall submit a report on such cases to the
Contact Committee set up under Article 53.

10.
The Member States shall inform the Commission
of the number and type of cases in which there have
been refusals pursuant to Article 6a or measures have
been taken in accordance with paragraph 5. Every two
years the Commission shall submit a report on such
cases to the Contact Committee set up under Article 53.

(*) OJ L 84, 26.3.1997, p. 22.’;

4. the following shall be inserted before Article 7:

‘SECTION IIIa

Obligations regarding the depositary’;

5. the title of Section IV and Article 12 shall be replaced

by the following:

‘SECTION IV

Obligations regarding investment companies

T i t l e A

Conditions for taking up business

Article 12

Access to the business of investment companies shall be
subject to prior official authorisation to be granted by
the home Member States competent authorities.

The Member States shall determine the legal form which
an investment company must take.’;

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6. the following Articles shall be inserted after Article 13:

‘Article 13a

1. Without prejudice to other conditions of general
application laid down by national
the competent
authorities shall not grant authorisation to an invest-
ment company that has not designated a management
company unless the investment company has a sufficient
initial capital of at least EUR 300 000.

law,

In addition, when an investment company has not
designated a management company authorised pursuant
to this Directive:

— the authorisation shall not be granted unless the
application for authorisation is accompanied by a
programme of activity setting out,
the
organisational structure of the investment company;

inter alia,

(a) does not make use of the authorisation within 12
months, expressly renounces the authorisation or has
ceased the activity covered by this Directive more
than 6 months previously unless the Member State
concerned has provided for authorisation to lapse in
such cases;

(b) has obtained the authorisation by making false state-

ments or by any other irregular means;

(c) no longer fulfils the conditions under which author-

isation was granted;

(d) has

seriously and/or

systematically infringed the

provisions adopted pursuant to this Directive; or

(e) falls within any of

the cases where national

law

provides for withdrawal.

the

directors

— the directors of the investment company shall be of
sufficiently good repute and be sufficiently experi-
enced also in relation to the type of business carried
the
out by the investment company. To that end,
names of
every person
succeeding them in office must be communicated
forthwith to the competent authorities. The conduct
company's business must be
of
decided by at least two persons meeting such condi-
tions. Directors shall mean those persons who, under
the law or the instruments of incorporation, repre-
sent
the investment company, or who effectively
determine the policy of the company;

an investment

and of

— moreover, where close links exist between the invest-
ment company and other natural or legal persons,
the competent authorities shall grant authorisation
only if those do not prevent the effective exercise of
their supervisory functions.

The competent authorities shall also refuse authorisation
if the laws, regulations or administrative provisions of a
non-member country governing one or more natural or
legal persons with which the investment company has
close links, or difficulties involved in their enforcement,
prevent
supervisory
functions.

exercise of

effective

their

the

competent

The
investment
companies to provide them with the information they
require.

authorities

require

shall

2.
An applicant shall be informed, within six months
of the submission of a complete application, whether or
not authorisation has been granted. Reasons shall be
given whenever an authorisation is refused.

An investment company may start business as

3.
soon as authorisation has been granted.

The

competent

4.
authorities may withdraw the
authorisation issued to an investment company subject
to this Directive only where that company:

T i t l e B

Operating conditions

Article 13b

Articles 5g and 5h shall apply to investment companies
that have not designated a management
company
authorised pursuant to this Directive. For the purpose of
this Article “management company” shall be construed
as “investment company”.

Investment companies may only manage assets of their
own portfolio and may not, under any circumstances,
receive any mandate to manage assets on behalf of a
third party.

Article 13c

Each home Member State shall draw up prudential rules
which shall be observed at all
times by investment
that have not designated a management
companies
company authorised pursuant to this Directive.

for

safeguard

electronic

arrangements

the competent authorities of

the home
In particular,
Member State, having regard also to the nature of the
investment company, shall require that the company has
sound administrative and accounting procedures, control
and
data
processing and adequate internal control mechanisms
including,
transactions
in particular, rules for personal
by its employees or for the holding or management of
investments in financial
instruments in order to invest
its initial capital and ensuring, inter alia, that each trans-
action involving the company may be reconstructed
according to its origin, the parties to it, its nature, and
the time and place at which it was effected and that the
assets of the investment company are invested according
to the instruments of incorporation and the legal provi-
sions in force.’;

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7. the following shall be inserted before Article 14:

‘SECTION IVa

Obligations regarding the depositary’;

8. Article 27(1) shall be replaced by the following:

An investment company and, for each of the unit
‘1.
trusts and common funds it manages, a management
company, must publish:

— a simplified prospectus,

— a full prospectus,

— an annual report for each financial year, and

— a half-yearly report covering the first six months of

the financial year.’;

9. Article 28 shall be replaced by the following:

‘Article 28

1.
Both the simplified and the full prospectuses must
include the information necessary for investors to be
able to make an informed judgement of the investment
the risks
proposed to them, and,
attached thereto. The latter shall include, independent of
the instruments invested in, a clear and easily under-
standable explanation of the fund's risk profile.

in particular, of

The full prospectus shall contain at least the infor-
2.
mation provided for in Schedule A, Annex I
to this
Directive, in so far as that information does not already
appear in the fund rules or instruments of incorporation
annexed to the full prospectus
in accordance with
Article 29(1).

The

shall

simplified

prospectus

in
3.
contain
summary form the key information provided for
in
Schedule C, Annex I to this Directive. It shall be struc-
tured and written in such a way that it can be easily
understood by the average investor. Member States may
permit that the simplified prospectus be attached to the
full prospectus as a removable part of it. The simplified
prospectus can be used as a marketing tool designed to
be used in all Member States without alterations except
translation. Member States may therefore not
require
any further documents or additional
information to be
added.

least

include at

in Chapters

The half-yearly report must

the
6.
information provided for
to IV of
Schedule B, Annex I to this Directive; where a UCITS
has paid or proposes to pay an interim dividend, the
figures must indicate the results after tax for the half-
interim dividend paid or
year
proposed.’;

concerned and the

I

10. Article 29 shall be replaced by the following:

‘Article 29

The fund rules or an investment company's instru-
form an integral part of

1.
ments of
the full prospectus and must be annexed thereto.

incorporation shall

The documents referred to in paragraph 1 need
2.
full prospectus
annexed to the
not, however, be
provided that
informed that on
request he or she will be sent those documents or be
apprised of the place where,
in each Member State in
which the units are placed on the market, he or she
may consult them.’;

the unit-holder

is

11. Article 30 shall be replaced by the following:

‘Article 30

The essential elements of
prospectuses must be kept up to date.’;

the simplified and the full

12. Article 32 shall be replaced by the following:

‘Article 32

UCITS must send their simplified and full prospectuses
and any amendments thereto, as well as their annual
to the competent authorities.’;
and half-yearly reports,

13. Article 33 shall be replaced by the following:

‘Article 33

The

1.
simplified prospectus must be offered to
subscribers free of charge before the conclusion of the
contract.

In addition, the full prospectus and the latest published
annual and half-yearly reports
shall be supplied to
subscribers free of charge on request.

The

2.
supplied to unit-holders free of charge on request.

and half-yearly

reports

annual

shall be

4.
Both the full and the simplified prospectus may be
incorporated in a written document or in any durable
medium having an equivalent legal status approved by
the competent authorities.

5.
The annual report must include a balance-sheet or
a statement of assets and liabilities, a detailed income
and expenditure account for the financial year, a report
the financial year and the other
on the activities of
information provided for in Schedule B, Annex I to this
Directive, as well as any significant information which
will enable investors to make an informed judgment on
the development of the activities of the UCITS and its
results.

3.
The annual and half-yearly reports must be avail-
able to the public at the places, or through other means
approved by the competent authorities, specified in the
full and simplified prospectus.’;

14. Article 35 shall be replaced by the following:

‘Article 35

All publicity comprising an invitation to purchase the
units of UCITS must indicate that prospectuses exist and
the places where they may be obtained by the public or
how the public may have access to them.’;

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Official Journal of the European Communities

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15. Article 46 shall be replaced by the following:

‘Article 46

If a UCITS proposes to market its units in a Member
State other than that in which it is situated, it must first
inform the competent authorities of that other Member
State accordingly. It must simultaneously send the latter
authorities:

— an attestation by the competent authorities to the
effect that it fulfils the conditions imposed by this
Directive,

— its fund rules or its instruments of

incorporation,

— its full and simplified prospectuses,

— where appropriate,

its latest annual report and any

subsequent half-yearly report, and

— details of the arrangements made of the marketing

of its units in that other Member State.

An investment company or a management company
its units in that other Member
may begin to market
State two months after such communication, unless the
authorities of the Member States concerned establish, in
a reasoned decision taken before the expiry of
that
period of two months, that the arrangements made for
the marketing of units do not comply with the provi-
sions referred to in Article 44(1) and Article 45.’;

16. Article 47 shall be replaced by the following:

‘Article 47

If a UCITS markets its units in a Member State other
it must distribute in
than that in which it is situated,
that other Member State,
in accordance with the same
procedures as those provided for in the home Member
the annual
State,
and half-yearly
information
provided for in Articles 29 and 30.

the full and simplified prospectuses,

and the other

reports

These documents shall be provided in the or one of the
official
the host Member State or in a
language approved by the competent authorities of the
host Member State.’;

languages of

17. the following Articles shall be added after Article 52:

‘Article 52a

1. Where, through the provision of services or by the
company
establishment of branches,
the
operates
competent
States
authorities
concerned shall collaborate closely.

in one or more host Member States,
all

a management

the Member

of

They shall supply one another on request with all the
information concerning the management and ownership
of such management companies that is likely to facili-
tate their supervision and all information likely to facili-
tate the monitoring of such companies. In particular, the
authorities of the home Member State shall cooperate to

ensure that
collect the particulars referred to in Article 6c(2).

the authorities of

the host Member State

supervision,

Insofar as it is necessary for the purpose of exer-
2.
competent
cising their powers of
authorities of the home Member State shall be informed
by the competent authorities of the host Member State
of any measures
taken by the host Member State
pursuant
to Article 6c(6) which involve penalties
imposed on a management company or restrictions on
a management company's activities.

the

Article 52b

the competent authorities of

1.
Each host Member State shall ensure that, where a
management company authorised in another Member
State carries on business within its territory through a
branch,
the management
company's home Member State may, after informing the
competent authorities of the host Member State, them-
selves or
they
instruct for the purpose, carry out on-the-spot verifica-
tion of the information referred to in Article 52a.

through the intermediary of persons

The

competent authorities of

2.
the management
company's home Member State may also ask the
competent authorities of
the management company's
host Member State to have such verification carried out.
Authorities which receive such requests must, within the
framework of their powers, act upon them by carrying
out the verifications themselves, by allowing the authori-
ties who have requested them to carry them out or by
allowing auditors or experts to do so.

This Article shall not affect

the
3.
in
competent authorities of
discharging their responsibilities under this Directive, to
carry out on-the-spot verifications of branches estab-
lished within their territory.’;

the host Member State,

the right of

18. the Annex

to Directive 85/611/EEC shall be

re-

numbered as Annex I;

19. Schedule A of Annex I shall be amended as follows:

1. Under

the
investment
following shall be added:

column ‘Information concerning
paragraph 1.2,
company’,

after

the
the

‘1.3. In the case of

investment compartments,

investment companies having
the indica-

different
tion of the compartments.’

2. Under

column ‘Information concerning
the
investment
1.13,
company’,
following sentence shall be added:

paragraph

in

the
the

‘In the case of investment companies having different
information on how a
investment compartments,
unit-holder may pass from one compartment
into
another and the charges applicable in such cases.’

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3. The following paragraphs shall be added after para-

graph 4:
‘5. Other investment information

5.1. Historical performance of

the unit

trust/
common fund or of the investment company
(where applicable) — such information may
be either
included in or attached to the
prospectus;

5.2. Profile of the typical

investor for whom the
trust/common fund or the investment

unit
company is designed.

6. Economic information

6.1. Possible expenses or

fees, other

than the
charges mentioned in paragraph 1.17, distin-
guishing between those to be paid by the
unit-holder and those to be paid out of the
unit trust's/common fund's or of the invest-
ment company's assets.’;

20. the text of Annex I to this Directive shall be added to

Annex I to Directive 85/611/EEC;

21. Annex II to this Directive shall be added as Annex II to

Directive 85/611/EEC.

Transitional and final provisions

Article 2

Investment firms, as defined in Article 1(2) of Directive
1.
93/22/EEC,
services
authorised to carry out only
provided for in Section A(3) and in Section C(1) and (6) of
the Annex to that Directive, may obtain authorisation under
this Directive to manage unit
trusts/common funds and
investment companies and to qualify themselves as ‘manage-
ment companies’. In that case, such investment firms must
give up the authorisation obtained under Directive 93/
22/EEC.

the

2. Management companies already authorised before 13
February 2004 in their home Member State under Directive
85/611/EEC to manage UCITS in the form of unit trusts/
common funds and investment companies shall be deemed
to be authorised for the purposes of
the
laws of those Member States provide that to take up such

this Directive if

activity they must comply with conditions equivalent
those imposed in Articles 5a and 5b.

to

3. Management companies, already authorised before 13
February 2004, which are not included among those referred
to in paragraph 2 may continue such activity provided that,
no later than 13 February 2007 and pursuant to the provi-
sions of their home Member State, they obtain authorisation
to continue such activity in accordance with the provisions
adopted in implementation of this Directive.

Only the grant of
such authorisation shall enable such
management companies to qualify under the provisions of
this Directive on the right of establishment and the freedom
to provide services.

Article 3

No later than 13 August 2003 Member States shall adopt
the laws, regulations and administrative provisions necessary
for them to comply with this Directive. They shall forthwith
inform the Commission thereof.

They shall apply these measures no later than 13 February
2004.

adopt

they shall
When Member States
contain a reference to this Directive or shall be accompanied
by such reference on the occasion of their official publica-
tion. The methods of making such a reference shall be laid
down by the Member States.

these measures

Article 4

This Directive shall enter into force on the date of its publi-
cation in the Official Journal of the European Communities.

This Directive is addressed to the Member States.

Article 5

Done at Brussels, 21 January 2002.

For the European Parliament

For the Council

The President

P. COX

The President

M. ARIAS CAÑETE

13.2.2002

EN

Official Journal of the European Communities

L 41/33

ANNEX I

‘SCHEDULE C

Contents of the simplified prospectus

Brief presentation of the UCITS

— when the unit trust/common fund or the investment company was created and indication of the Member State where

the unit trust/common fund or the investment company has been registered/incorporated,

— in the case of UCITS having different investment compartments, the indication of this circumstance,

— management company (when applicable),

— expected period of existence (when applicable),

— depositary,

— auditors,

— financial group (e.g. a bank) promoting the UCITS.

Investment information

— short definition of the UCITS' objectives,

— the unit trust's/common fund's or the investment company's investment policy and a brief assessment of the fund's

risk profile (including,

if applicable,

information according to Article 24a and by investment compartment),

— historical performance of the unit trust/common fund/investment company (where applicable) and a warning that this
is not an indicator of future performance — such information may be either included in or attached to the prospectus,

— profile of the typical

investor the unit trust/common fund or the investment company is designed for.

Economic information

— tax regime,

— entry and exit commissions,

— other possible expenses or fees, distinguishing between those to be paid by the unit-holder and those to be paid out of

the unit trust's/common fund's or the investment company's assets.

Commercial

information

— how to buy the units,

— how to sell the units,

— in the case of UCITS having different investment compartments how to pass from one investment compartment into

another and the charges applicable in such cases,

— when and how dividends on units or shares of the UCITS (if applicable) are distributed,

— frequency and where/how prices are published or made available.

Additional

information

— statement that, on request, the full prospectus, the annual and half-yearly reports may be obtained free of charge

before the conclusion of the contract and afterwards,

— competent authority,

— indication of a contact point (person/department, timing, etc.) where additional explanations may be obtained if

needed,

— publishing date of the prospectus.’

L 41/34

EN

Official Journal of the European Communities

13.2.2002

ANNEX II

‘ANNEX II

Functions included in the activity of collective portfolio management:

— Investment management.

— Administration:

(a) legal and fund management accounting services;

(b) customer inquiries;

(c) valuation and pricing (including tax returns);

(d) regulatory compliance monitoring;

(e) maintenance of unit-holder register;

(f) distribution of income;

(g) unit issues and redemptions;

(h) contract settlements (including certificate dispatch);

(i) record keeping.

— Marketing.’