CELEX: 51986PC0315
Language: en
Date: 1986-06-04
Title: Proposal for a Council Directive amending Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as far as concerns the investment policy of certain UCITS

No C 155/4                               Official Journal of the European Communities                                 21.6.86
                                                                II
                                                        (Preparatory Acts)
                                                  COMMISSION
             Proposal for a Council Directive amending Directive 85/611 / E E C on the coordination of laws,
             regulations and administrative provisions relating to undertakings for collective investment in
                 transferable securities (UCITS) as far as concerns the investment policy of certain UCITS
                                                       COM(86) 315 final
                                 (Submitted by the Commission to the Council on 11 June 1986
                                                         (86/C 155/04)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                            Whereas, for the reasons given, a similar derogation is
                                                                    justified in the case of Danish mortgage credit bonds;
                                                                    whereas, however, there are in other Member States
Having regard to the Treaty establishing the European
                                                                    bonds which offer the investor equivalent guarantees by
Economic Community, and in particular Article 57 (2)                virtue of the special rules and regulations which are
thereof,                                                            applicable to them; whereas it is therefore necessary to
                                                                    extend the derogation to all those bonds, while at the
Having regard to the proposal from the Commission,                  same time leaving it to Member States to draw up
                                                                    themselves the list of bonds which they may wish to treat
                                                                    as equivalent to State bonds and providing for a
Having regard to the opinion of the European Par-                   procedure for informing the other Member States similar
liament,                                                            to that provided for in Article 20 of Directive 85/611/
                                                                    EEC;
Having regard to the opinion of the Economic and
Social Committee,
                                                                    Whereas certain unit trust management companies have
                                                                    recently set up in the United Kingdom parallel unit trusts
Whereas Article 22 (1) and (2) of Council Directive                 (managed funds) which invest their assets exclusively in
85/611/EEC (') as amended by                    , limits the        units issued by other UCITS which they manage;
investment of UCITS assets in transferable securities
issued by the same body to 5 %, a limit which may, if
required, be increased to 10 % ;                                    Whereas those parallel unit trusts may prove useful to
                                                                    investors who, while wishing to diversify their
Whereas that limit poses special problems for UCITS                 investments, are not themselves in a position to choose
established in Denmark in cases where they wish to                  between a whole range of specialist and general funds
invest an appreciable proportion of their assets on the             managed by the same management company;
domestic bond market, since that market is dominated by
mortgage credit bonds and the number of institutions
issuing such bonds is very small;                                   Whereas arrangements should be made for those parallel
                                                                    funds to benefit from the advantages provided for in
                                                                    Directive 85/611/EEC, and particularly from the
Whereas those mortgage credit bonds are subject in                  freedom to market their units within the Community;
Denmark to special rules and supervision designed to                whereas, to that end, it is necessary to exempt those
protect holders and are treated under Danish legislation            funds from application of the investment rules laid down
as equivalent to bonds issued or guaranteed by the State;           in Section V of Directive 85/611/EEC, which are inap-
                                                                    propriate in their case, while at the same time making
Whereas Article 22 (3) of Directive 85/611/EEC                      them subject to special investment rules and to the other
derogates from paragraphs 1 and 2 of that Article in the            obligations laid down in that Directive;
case of bonds issued or guaranteed by a State and auth-
orizes UCITS to invest up to 35 % of their assets in such
bonds;                                                              Whereas it is necessary to extend those arrangements to
                                                                    parallel funds which may be set up in other Member
                                                                    States and to render them also applicable to investment
                                                                    companies investing their assets in the units of other
0) OJ No L 375, 31. 12. 1985, p. 3.                                 UCITS to which they are linked,
 ---pagebreak--- 21.6. 86                                Official Journal of the European Communities                              No C 155/5
HAS ADOPTED THIS DIRECTIVE:                                           (a) The parallel UCITS must invest its assets —
                                                                          subject to the necessary conditions concerning
                          Article 1                                       liquidity — exclusively in units issued by UCITS
                                                                          subject to the provisions of this Directive,
Directive 85/611/EEC is hereby amended as follows:                        including Articles 19 to 26 thereof;
                                                                      (b) The parallel UCITS and the UCITS in the units
1. The following paragraphs are added to Article 22:
                                                                          of which it invests must:
   '4.     Member States may raise the limit laid down in                 — be managed          by    the  same   management
   paragraph 1 to a maximum of 35 % where the                                  company, or
   transferable securities of an issuer are bonds which in                — be managed or controlled by companies which
   view of the guarantees they offer investors by virtue                       are separate but linked by             common
   of the special rules and regulations governing them in                      management or control or by a substantial
   the Member State of issue, are equivalent to the                            direct or indirect holding.
   securities referred to in paragraph 3.
                                                                      (c) The parallel UCITS must have the opportunity of
   Member States shall send to the Commission lists of                    investing its assets in the units of at least 10
   the categories of bonds which they plan to treat as                    UCITS which meet the criteria set out at (a) and
   equivalent to the securities referred to in paragraph 3                (b) and which can be distinguished from each
   and any amendments which they contemplate making                       other by their investment policies and/or
   to those lists in accordance with the procedure and                    objectives.
   arrangements laid down in Article 20 (1). The                      (d) The parallel UCITS must describe in its instru-
   Commission shall forward that information to the                       ments of incorporation or fund rules and in its
   other Member States in accordance with the                             prospectus or any promotional literature the
   procedure laid down in Article 20 (2).                                 characteristics of the UCITS in the units of which
                                                                          it is authorized to invest. Those documents must
   5.     Investments in transferable securities issued by                clearly show in figures the charges, taxes,
   the same body carried out in accordance with                           commissions and other costs directly or indirectly
   paragraphs 1, 2, 3 and 4 shall under no circumstances                  borne by the parallel UCITS' unit-holders, so that
   exceed in total 35 % of the assets of a UCITS.                         the latter are able to assess the cost of investment
                                                                          in the parallel UCITS in relation to the cost of
   The transferable securities referred to in paragraphs 3                direct investment in the units of the underlying
   and 4 shall not be taken into account for the purpose                  UCITS.'
   of applying paragraph 2.'
                                                                                              Article 2
2. The following Article 26a is inserted.
                                                                   The Member States shall bring into force the measures
    'Article 26a                                                   necessary to comply with this Directive by the same
    Member States may authorize a UCITS (hereinafter               dates as those provided for in Directive 85/611/EEC.
   referred to as a "parallel UCITS") to invest its assets,        They shall forthwith inform the Commission thereof.
   notwithstanding Articles 19 to 26, in units issued by                                      Article 3
    other UCITS provided that the following conditions
    are met:                                                       This Directive is addressed to the Member States.