CELEX: 51993PC0037
Language: en
Date: 1993-02-09
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)

No C 59 / 14                           Official Journal of the European Communities                                      2 . 3 . 93
    'Gas bottles shall be stored in an enclosure isolated          11 . in Annex II the following sentence is added after
    from the living quaters . .                                         'COMPONENTS' :
 9. the first paragraph of point 5.6.1 of Annex I is                    'This Annex refers to components covered by the
     amended as follows, (Fire protection — General) :                  harmonized standards such as : fire protection,
     'The type of equipment installed and the layout of                 steering gear.';
    the craft shall take account of the risk and spread of
     fire in the living quaters. Attention shall be paid to        1 2. point 4 of Annex II is amended as follows :
     the surroundings of open flame devices, especially in
     the vicinity of the engine compartment.';                          '4. Fixed fuel tanks and fuel hoses.';
10. point 5.7 of Annex I is replaced by :
                                                                   13 . in Annex III the following indent is added after the
     '5.7 . Navigation lights                                           second indent :
            Navigation lights shall be fitted in accordance
            with   the    1972 COLREG       Convention,    as           '— a declaration of conformity of the component
            subsequently amended.';                                          with the essential requirements of the Directive.'.
               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
                                                transferrable securities (Ucits)
                                                         (93 /C 59/09)
                                                COM(93) 37 final — SYN 453
                                     (Submitted by the Commission on 10 February 1993)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                           desirable to bring these funds within the scope of
                                                                   Directive 85 /61 1 /EEC since the attainment of this
Having regard to the Treaty establishing the European              objective will facilitate the removal of the restrictions on
                                                                   the free circulation of the units of these funds in the
Economic Community, and in particular Article 57 (2)
thereof,                                                           Community and such coordination is necessary to bring
                                                                   about a European capital market ;
Having regard to the proposal from the Commission,
                                                                   Whereas the inclusion of money market funds is
In cooperation with the European Parliament,                       achieved by allowing Ucits to invest freely in money
                                                                   market instruments ; whereas money market instruments
                                                                   cover those classes of transferable instruments which are
Having regard to the opinion of the Economic and                   normally dealt in on the money market, for example
Social Committee,                                                  treasury and local authority bills, certificates of deposit,
                                                                   commercial paper and bankers' acceptances ; whereas
Whereas the scope of Council Directive 85 /61 1 /EEC               Member States should have the option of choosing the
was confined initially to collective investment under­             list of eligible money market instruments on the basis of
takings of the open-end type which promote the sale of             objective criteria to take account of the existing
their units to the public in the Community and the sole            structural differences in the money markets of different
                                                                   countries ;
object of which is investment in transferable securities ;
whereas it was envisaged in the preamble to Directive
85 /61 1 /EEC that undertakings falling outside its scope
would be the subject of coordination at a later stage ;            Whereas, to take markets developments into account, it
                                                                   is desirable that the investment object of Ucits is widened
                                                                   in order to permit them also to invest in banking
Whereas money market funds and funds of funds have                 deposits ;
shown a considerable growth in certain Member States
in recent years ; whereas these two categories of funds,
given their operational features and investment object,            Whereas only Ucits investing solely in units issued by
may be regarded as very close to Ucits ; whereas it is             other Ucits (fund of Ucits) may be brought within the
 ---pagebreak---   2 . 3 . 93                             Official Journal of the European Communities                                   No C 59/ 15
  scope of Directive 85 /61 1 /EEC ; whereas a fund of Ucits       Whereas it is appropriate to favour the reduction of costs
  may be identified on the basis of a minimum number of            related to translation of documents in the cross-border
 Ucits in which it can invest ; whereas it is important that       marketing without impairing the degree of investor
  a fund of Ucits ensures to investors an adequate degree          protection ;
  of disclosure on the costs they incur ;
                                                                   Whereas technical adaptations to the rules laid down in
 Whereas it is appropriate that, save explicitly mentioned
                                                                   this Directive may from time to time be necessary to take
                                                                   new developments in the investment funds field into
 exemptions, the rules laid down for the authorization,            account ; whereas it is desirable to set a general criterion
 supervision, structure and activities of Ucits and for the        to define the technical nature of modifications ; whereas
 information to be published should apply to money                 it is important that these technical modifications should
 market funds and funds of Ucits as well ;
                                                                   be adopted in accordance with the procedure established
                                                                   in Directive .           . ./EEC,
 Whereas, for prudential reasons, Ucits should avoid
 assuming an excessive concentration of banking deposits           HAS ADOPTED THIS DIRECTIVE :
 to a single credit institution ;
                                                                                                   Article 1
 Whereas many directives have been adopted in the
 financial field in recent years ; whereas it seems therefore      In Directive 85/61 1 /EEC, as amended by Directive
 advisable to bring some Articles of Directive                     88 /220/EEC , the following amendments are made :
 85 /61 1 / EEC more in line with existing provisions of the
 Community legislation ;
                                                                     1 . Article 1 (2) shall be replaced by the following :
                                                                          '2 .     For the purposes of this Directive :
 Whereas Council Directive 89 / 646 / EEC and Directive
                                                                            (l) "Ucits" shall, subject to Article 2 ( 1 ), be under­
 . ./. . ./EEC (Investment Services Directive) provided the                      takings :
 basis for the single licence to supply financial services to
 credit institutions and investment firms respectively;                          — the sole object of which is the collective
 whereas Member States should not therefore restrict the                              investment in transferable securities and / or
 freedom of Ucits to choose a depository established in                               to place deposits with credit institutions of
 another Member State and authorized under the above                                  capital raised from the public and which
 Directives ;                                                                         operate on the principle of risk-spreading,
                                                                                      or
 Whereas it is desirable to make the Single Market                              — the sole object of which is the collective
 accessible to institutions and firms of third countries in                           investment    in  units of   other    Ucits in
 respect of the depositary function ; whereas it is essential                         accordance with the provisions in Article 26
 to provide that the rules applied to such firms may not                              (a) of capital raised from the public and
 be      more favourable   than    those  for     branches   of                      which operate on the principle of risk­
 institutions and firms from another Member State ;                                   spreading, and
                                                                                — the units of which are, at the request of
Whereas Article 21 of Directive 85 /61 1 / EEC contains
the rules under which Ucits are allowed to use derivative
                                                                                     holders, repurchased or redeemed, directly
                                                                                     or indirectly, out of those undertakings'
 instruments ; whereas it is necessary for the protection of                         assets. Action taken by a Ucits to ensure that
 investors to provide for a harmonized framework by                                  the stock exchange value of its units does
 introducing a minimum quantitative ceiling for the util­                            not significantly vary from their net asset
ization of financial derivatives ; whereas, considering the                          value shall be regarded as equivalent to such
new portfolio management techniques which have                                       repurchase or redemption ;
developed in recent years, it is desirable that Ucits may
use, in compliance with the above quantitative limit,                     (ii) "transferable securities" shall mean transferable
financial futures and options for the purpose of adjusting                      securities as defined in Article 1 of Directive
their portfolio's composition on a temporary basis ;                            . ./. . ./ EEC (ISD) ;
                                                                         (iii) "money market instruments" which , for the
Whereas the current limit of 5 % concerning the possi­                          purposes of this Directive, shall be regarded as
bility for Ucits of investing in other Ucits proved to be                       transferable securities, shall mean those classes
too stringent in certain markets ;                                              of transferable instruments normally dealt in on
                                                                                the money market which the Member States
                                                                                consider to :
Whereas Article 25 ( 1 ) of Directive 85 /61 1 /EEC
envisaged a coordination of the concept of significant                          — be liquid, and
influence at a later stage ; whereas, given the result
achieved in this field in other directives , it is desirable to                 — have a value which can be accurately
define significant influence in terms of a quantitative                              determined at any time or at least with the
limit ;                                                                              frequency stipulated in Article 34 .';
 ---pagebreak--- No C 59 / 16                             Official Journal of the European Communities                                       2 . 3 . 93
 2 . Article 8 ( 1 ), is replaced by :                               8 . in Article 21 the following paragraph shall be added :
     ' 1 . A depository must have an establishment in the
     same Member State as that of the management                         '3. in this context Ucits may carry out trans­
     company.' ;
                                                                         actions in financial derivative instruments provided
                                                                         that the exposures relating to these instruments are
                                                                         covered in the sense that Ucits must hold assets
 3 . in Article 8 the following two paragraphs shall be                  which may reasonably be expected to fulfil actual or
     added :                                                             potential obligations which exist or may arise as a
                                                                         result of the derivatives themselves .';
     '4 . Notwithstanding the provisions in paragraphs
      1 and 3 the competent authorities may allow unit
     trusts freely to choose a depository which is auth­             9. in Article 22 the following paragraph shall be added :
     orized to do safekeeping and administration of
     securities in one of the Member States according to                 '6 . A Ucits may place no more than 20 % of its
     Directive     89 / 646 / EEC  or   Directive  . ./. . ./ EEC
                                                                         assets on deposits with the same credit institution or
     (ISD).                                                              credit institutions within the same group.';
     5 . Member States shall not apply to depositories
     which are branches of institutions or firms having             10 . in Article 24 ( 1 ), 'of the first and second indents of
     their head office outside the Community, when                       Article 1 (2)' shall be replaced by : 'of the first and
     commencing or carrying on their services, provisions                third indents of Article 1 (2) (i)';
     which result in more favourable treatment than that
     accorded to depositories which are branches of
     institutions of firms having their head office in the          11 . in Article 24 (2), '5 % ' shall be replaced by ' 10 % ';
     Community.';
                                                                    12. Article 25 ( 1 ), shall be replaced by the following :
 4 . Article 15 ( 1 ), is replaced by :
     '1.       A depository must have an establishment in the            ' 1 . An investment company or a management
     same Member State as that of the investment                         company acting in connection with all of the unit
     company.';                                                          trusts which it manages and which fall within the
                                                                         scope of this Directive may not acquire any shares
 5 . in Article 15 the following two paragraphs shall be                 carrying voting rights which directly or indirectly
     added :                                                             represent 10 % or more of the capital or of the
                                                                         voting rights or which make it possible to exercise a
     '4 . Notwithstanding the provisions in paragraphs                   significant influence over the management of the
      1 and 3 the competent authorities may allow                        issuing body. The voting rights referred to in
                                                                         Article 7 of Directive 88 / 627 /EEC shall be taken
     investment companies freely to choose a depository                  into consideration .';
     which is authorized to do safekeeping and adminis­
     tration of securities in one of the Member States
      according to Directive 89/646/EEC or Directive                13 . in article 25 (2), third indent, 'of the first and second
      . ./. . ./EEC (ISD).                                               indents of Article 1 (2)' shall be replaced by : 'of the
                                                                         first and third indents of Article 1 (2) (i)';
      5 . Member States shall not apply to depositories
     which are branches of institutions or firms having
     their head office outside the Community, when                  14. after Article 26 the following new Article 26a shall
     commencing or carrying on their services, provisions                be added :
     which result in more favourable treatment than that
      accorded to depositories which are branches of                     'Article 26a
      institutions of firms having their head office in the
      Community.';                                                       Notwithstanding Article 24 (2), Article 24 ( 3) first
                                                                         subparagraph and Article 25 (2) third indent a Ucits
 6. in Article 19 the following shall be added to                        (hereinafter referred to as a "fund of Ucits") may
      paragraph 1 :                                                      invest its assets in units issued by other Ucits
                                                                         provided that the following conditions are met :
      ' and / or
                                                                         (a) a fund of Ucits must invest its assets exclusively
      (e) money market instruments';                                           in units issued by Ucits subject to the provisions
                                                                               of this Directive and may hold ancillary liquid
 7 . in Article 19 (2) (b) after ' 10 °/o of its assets in debt                assets   but  must    not   invest in    transferable
      instruments', shall be added, 'other than money                          securities or in units issued by other funds of
      market instruments , . . .';                                             Ucits ;
 ---pagebreak--- 2 . 3 . 93                                 Official Journal of the European Communities                                   No C 59 / 17
       (b) a fund of UGits must not invest more than 20 %                rantees of professional secrecy at least equivalent to
            of its assets in a single Ucits which meets the              those referred to in this Article .
            criteria set out in (a);
                                                                         4.     The authorities referred to in Article 49 which
       (c) a fund of Ucits must describe in its instruments              receive confidential information under paragraphs 1
            of incorporation or fund rules and in its pros­              or 2 may use it only in the course of their duties :
            pectus or any promotional literature the charac­
            teristics of the Ucits in the units of which it is           — to check that the conditions governing the taking
            authorized to invest. The prospectus must clearly                 up of the business of Ucits are met and to
            describe the nature of fees , charges , taxes,                    facilitate the monitoring of the conduct of such
            commissions and other costs which directly or                     business, especially with regard to administrative
            indirectly are expected to be borne by the fund                   and accounting procedures and internal control
            of Ucits ' unit-holders .';                                       mechanisms, or
                                                                         — to impose sanctions , or
15 . Article 44 ( 2) shall be replaced by the following :
                                                                         — in an administrative appeal against a decision of
       '2 .    Nothing in paragraph 1 shall prevent Ucits                     the competent authorities , or
       with head offices in other Member States from
       advertising their units through all available means of            — in court proceedings, initiated under Article 51
       communication in the host Member State, subject to                     (2).
       any rules governing the form and the content of
       such advertising adopted in the interest of the                   5 . Paragraphs 1 and 4 shall not preclude the
       general good .';                                                  exchange of information :
                                                                         ( a) within a Member State, where there are two or
16 . in Article 47 , ' in at least one of that other Member                    more competent authorities ; or
       State's official languages ', is replaced by : ' in a
       language which is easily understandable for the                   (b) between Member States, between competent
       investors concerned in that other Member State';                        authorities ; and
17 . Article 50 shall be replaced by :                                        — authorities responsible for the supervision of
                                                                                   other financial organizations and insurance
       ' Article 50                                                                undertakings and the authorities responsible
                                                                                   for the supervision of financial markets,
        1.    Member States shall provide that all persons
       who work or who have worked for the authorities                         — bodies involved in the liquidation of Ucits
       referred to in Article 49, as well as auditors and                          and in other similar procedures, or
       experts acting on behalf of these authorities, shall be
       bound by the obligation of professional secrecy.                       — persons responsible for carrying out statutory
       That means that no confidential information which                           audits of the accounts of Ucits and other
       they may receive in the course of their duties may be                       financial institutions ,
       divulged to any person or authority whatsoever,
       except in summary or aggregate form, such that                    in the discharge of their supervisory functions . The
       individual     Ucits   cannot    be identified , without          information received shall be subject to the
       prejudice to cases covered by criminal law.                       conditions of professional secrecy referred to in
                                                                         paragraph 1 .
       Nevertheless , where a Ucits has been declared
                                                                         6. This Article shall not prevent an authority
       bankrupt or is being compulsorily wound up,                       referred to in Article 49 from disclosing to those
       confidential information which does not concern
                                                                         central banks which do not supervise Ucits indi­
       third parties involved in attempts to rescue that Ucits           vidually such information as they may need to act as
       may be divulged in civil or commercial proceedings.               monetary authorities . Information received in this
                                                                         context shall be subject to the conditions of
       2.     Paragraph 1 shall not prevent the authorities of           professional secrecy referred to in paragraph 1 .
       the various Member States referred to in Article 49
       from exchanging information in accordance with this               7. In addition, notwithstanding the provisions
       Directive. Such information shall be subject to the               referred to in paragraphs 1 and 4, the Member
       conditions of professional secrecy referred to in                 States may, by virtue of provisions laid down by law,
       paragraph 1 .                                                     authorize the disclosure of certain information to
                                                                         other departments of their central government
       3 . Member States may conclude cooperation                        administrations responsible for legislation on the
       agreements providing for exchanges of information                 supervision       of    credit     institutions ,   financial
       with the competent authorities of third countries                 institutions , investment firms and insurance under­
       only if the information disclosed is subject to gua­              takings and to inspectors acting on behalf of those
 ---pagebreak--- No C 59 / 18                           Official Journal of the European Communities                                  2 . 3 . 93
     departments. However, such disclosure may be made                    strict requirements for the Ucits in order to take
     only where necessary for reasons of prudential                       account of developments on financial markets ,
     control .
                                                                      — alignment of terminology on and the framing of
     The Member States shall, however, provide that                       definitions in accordance with subsequent acts on
     information received under paragraphs 2 and 5 may                    firms and related matters .'
     never be disclosed in the cases referred to in this
     paragraph except with the express consent of the                                       Article 2
     competent authorities which disclosed the infor­
     mation .';                                                  1 . Member States shall bring into force the laws,
                                                                 regulations and administrative provisions necessary to
18 . after Article 53 the following new Article 53a is           comply with this Directive by 1 July 1994 at the latest.
     added :
                                                                 When Member States adopt the measures referred to in
     'Article 53a                                                the first subparagraph, they shall contain a reference to
     The technical modifications to be made to this
                                                                 this Directive or shall be accompanied by such reference
                                                                 on the occasion of their official publication. The
     Directive in the following areas shall be adopted in        methods of making such a reference shall be laid down
     accordance with the procedure laid down in                  by the Member States .
     Directive . ./. . ./ EEC :
     — clarification of the definitions in order to ensure       2.    Member       States   shall    communicate   to      the
         uniform application of this Directive throughout        Commission the text of provisions of national law which
         the Community,                                          they adopt in the field governed by this Directive.
     — adaptation of the ceilings referred to in Articles                                   Article 3
         19 (2) and ( 3), 21 (3), 22, 24 (2), 25 and 36 (2)
         where such adaptations will not lead to more            This Directive is addressed to the Member States .