CELEX: 51976PC0152
Language: en
Date: 1976-04-14
Title: PROPOSAL FOR A COUNCIL DIRECTIVE FOR THE COORDINATION OF LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS REGARDING COLLECTIVE INVESTMENT UNDERTAKINGS FOR TRANSFERABLE SECURITIES

26. 7. 76                         Official Journal of the European Communities                             No C 171/1
                                                         II
                                                 (Preparatory Acts)
                                              COMMISSION
              Proposal for a Council Directive for the coordination of laws, regulations and
              administrative provisions regarding collective investment undertakings for transferable
                                                      securities
                        (Submitted by the Commission to the Council on 29 April 1976)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                       undertakings and do not             ensure   equivalent
                                                               protection for unitholders;
Having regard to the Treaty establishing the
European Economic Community and in particular                  Whereas national laws governing collective
Article 57 (2),                                                investment undertakings should be coordinated with
                                                               a view to approximating the conditions of
                                                               competition     between     these    undertakings     at
Having regard to the proposal from the Commission,             Community level, at the same time ensuring the
                                                               effective and more uniform protection of unit-
Having regard to the opinion of the European                   holders; whereas it seems that such coordination
Parliament,                                                    would also facilitate access by CIUTS situated in one
                                                               Member State to activities in the other Member
                                                               States;
Having regard to the opinion of the Economic and
Social Committee,
                                                               Whereas the attainment of these objectives is
                                                               essential for the removal of restrictions on the free
Whereas under the Treaty any discriminatory                    circulation of units of collective investment
treatment     based    on     nationality    concerning        undertakings in the Community, and consequently
establishment and provision of services is prohibited          this coordination falls within the idea of the creation
since the end of the transitional period; whereas              of a European capital market;
Council Directive of 28 June 1973 on the abolition
of restriction on freedom of establishment and                 Whereas to achieve these objectives, provision should
freedom to provide services in respect of self-
                                                               be made for common basic rules concerning the
employed activities of banks and other financial               authorization, supervision, structure, activities and
institutions^1) considered that the obligation for a          information for collective investment undertakings
company intending to carry on the activity of                  situated in the Member States which they must
manager or trustee of a unit trust in another
                                                               publish;
Member State to be incorporated in that State comes
within the scope of this prohibition;
                                                               Whereas the application of these common rules is a
                                                               sufficient guarantee to collective investment
Whereas the laws of the Member States relating to              undertakings situated in a Member State to permit
collective investment undertakings differ appreciably         them, subject to provisions relating to movements of
from one State to another, particularly as regards the        capital, to market their units in other Member States
extent of the obligations and controls which are               without these Member States being able to make the
imposed upon these undertakings; whereas these                 undertakings or their units subject of any provision
differences disturb competitive conditions between            whatsoever other than regulation for marketing;
                                                              whereas nevertheless if a CIUTS in one markets its
C1) OJ No L 194,16. 7.1973, p. 1.                              units in a different Member State it should provide a
 ---pagebreak--- No C 171/2                         Official Journal of the European Communities                                26. 7. 76
financial service in that other Member State to allow             assets' is hereby defined as the investment in
unitholders therein to easily exercise their financial            such transferable securities and liquid assets of
rights;                                                            at least 80 °/o of the capital collected,
                                                             — whose units are or have been issued continuously
Whereas, firstly, the coordination of the laws of                 or in blocks at short intervals and/or have been
Member States should be confined to collective                    directly or indirectly repurchased or redeemed at
investment undertakings other than these which are                the request of the holder, at the expense of the
'closed' which invest exclusively in securities;                   assets of such undertakings.
whereas, on account of the various problems raised
by collective investment undertakings which do not
invest exclusively in securities and these which are          2.     For the purposes of this Directive the following
closed, these should be coordinated at a later date,          shall not be deemed to be CIUTS:
                                                              (a) closed investment companies;
                                                              (b) CIUTS whose assets are mainly invested other
HAS ADOPTED THIS DECISION:                                        than in transferable securities and liquid assets
                                                                   through the medium of subsidiary companies.
                        SECTION I
                                                                                        Article 3
         GENERAL PROVISIONS AND FIELD OF
                      APPLICATION                             For the purposes of this Directive, a CIUTS shall be
                                                              deemed to be situated in the Member State in which
                                                              its business is effectively carried on.
                         Article 1
1. Member States shall apply the provisions of                                         Article 4
this Directive to collective investment undertakings
for transferable securities ('CIUTS') situated within         For the purposes of this Directive, the following
their territories.                                            definitions shall apply:
2.     Subject to the provisions relating to the              (a) investment company:
movement of capital and to Articles 55 (1) and 61                  CIUTS with a corporate              structure,    i.e.,
 (2) of this Directive, a Member State shall not apply             established as a company;
 any provisions whatsoever to CIUTS situated in
another Member State or to the units issued by such           (b) unit trusts:
CIUTS.                                                             CIUTS with a non-corporate structure;
3.     Member States shall apply stricter requirements        (c) management company:
to CIUTS situated within their territories than those             the company entrusted with managing a unit
provided in Article 5 et seq of this Directive and any             trust;
additional requirements, provided these are of
general application and do not conflict with the              (d) depositary company:
provisions of this Directive.                                     the company entrusted with custody of the assets
                                                                   of a unit trust or investment company;
                                                              (e) fund rules:
                         Article 2                                 all the contractual rules or 'trust rules'
                                                                   governing the existing local relationships, within
1.     For the purposes of this Directive, CIUTS are              the framework of a unit trust, between the
hereby defined as investment companies and unit                   management company, the depositary company
trusts:                                                            and the unitholders;
— whose object is the collective investment, mainly           (f) unit:
     in transferable securities and liquid assets, of              any material representation of unitholders' rights
     capital acquired by means of offer to the public              in CIUTS assets, whether such rights take the
     and whose operations are based on the principle               form of shares issued by the CIUTS or by the
     of spreading the investment risk. 'Investment                 registration of the unitholders in a register kept
     mainly in transferable securities and liquid                  by the CIUTS;
 ---pagebreak---  26. 7. 76                             Official Journal of the European Communities                          No C 171/3
  (g) directors:                                                                          SECTION III
      persons who by virtue of the law or the articles
      or memorandum of association represent the                   OBLIGATIONS REGARDING THE STRUCTURE OF
      management, investment or depositary company,                                      UNIT TRUSTS
      or who have assumed managerial responsibilities
      at a senior level;
  (h) competent authorities:                                                                Article 6
      those in the Member States in which the CIUTS
      is situated.                                                 For the purposes of this Directive a unit trust shall
                                                                   be deemed to include a management company and a
                                                                  depositary company in addition to the capital
                                                                   accumulated.
                         SECTION II
             AUTHORIZATION OF THE CIUTS                                                     Article 7
                                                                  1.    The management company shall have its
                                                                  registered office in the Member State where the unit
                           Article 5                              trust is situated, or shall be established there if its
                                                                  registered office is in another Member State.
 1.     A CIUTS shall not conduct operations unless it
 has been authorized by the competent authorities.                2.    The management company shall have sufficient
 Such authorization shall be valid for all the Member             paid up capital to enable it to carry out its activities
 States.                                                          effectively and meet its liabilities.
 2.     A unit trust shall only be authorized if the
 competent        authorities     have   approved       the                                Article 8
 management company, the fund rules and the choice
 of depositary company. An investment company
 shall only be authorized if the competent authorities            The activities of the management company shall be
 have approved both the articles and memorandum of                limited to the management of unit trusts.
 association and the choice of depositary company.
3.      The competent authorities shall not authorize a                                    Article 9
 CIUTS if the directors of the management company,
the investment company or the depositary company
                                                                  1.    The management company shall inform the
are not of good repute or are not competent to carry
                                                                  competent authorities of the names of all its partners
out their duties. The names of the directors of the
                                                                  and the amounts of their respective holdings in the
management company, the investment company, and
                                                                 company.
their successors in office should therefore be
reported immediately to the competent authorities.
The same shall apply to directors of the depositary              2.    Shares in the management company may only
company, unless such notification has already been               be sold or otherwise disposed of with the approval
given to other authorities of the Member State in                of the competent organs of the management
which the CIUTS is situated.                                     company.
4.     The management company or depositary
company shall only be replaced and the fund rules                                         Article 10
or memorandum or articles of association of the
investment company shall only be amended with the
approval of the competent authorities.                           1.    The safekeeping of transferable securities and
                                                                 liquid assets which form part of the assets of the unit
                                                                 trust shall be the responsibility of the depositary
5.     Any amendment of the memorandum or                        company which shall hold them in a separate
articles of association of the management company                account. This rule shall also apply to all other assets
should be reported immediately to the competent                  of the unit trust whose safekeeping can be assured to
authorities.                                                     a great extent by the depositary company.
 ---pagebreak--- N o C 171/4                            Official Journal of the European Communities                                 26. 7. 76
2.     The depositary company shall moreover have                 towards unitholders shall be direct or indirect
the following duties:                                             through the management company depending on the
                                                                  legal nature of the relationship between the
(a) taking all necessary measures to ensure the day-              depositary company and the unitholders. Clauses in
     to-day administration of the unit trust's assets of          the fund rules or any other agreement which may
     which it is the trustee;                                     exclude or restrict this liability shall have no effect.
(b) taking all necessary measures to ensure that the
     sale, issue, repurchase, redemption and the
     cancellation of units by the unit trust is carried                                    Article 13
     out in accordance with statutory provisions and
     fund rules;
                                                                  1.     The same company shall not act                    as
(c) taking all necessary measures to ensure that the              management company and depositary company.
     value of the units is calculated in accordance
     with statutory provisions and,fund rules;                    2.    The management company and the depositary
(d) carrying out the instructions of the management               company shall act, in carrying out their respective
     company relating to the assets of the unit trust,            roles in the unit trust, in the sole interest of the
                                                                  unitholders.
     unless these are not in accordance with the law
     or the fund rules;
 (e) taking all necessary measures to ensure that:
                                                                                           Article 14
     — securities sold on behalf of the unit trust are
         handed over only in return for payment of
         their equivalent value and that such equivalent          1.     The terms and conditions of replacement of the
         value is entrusted to its custody,                       management company and the depositary company
                                                                  shall be laid down by statute or by fund rules. The
     — payment for the securities purchased on                    statutory provisions shall provide that the competent
         behalf of the unit trust is made only on the             authorities shall demand the replacement of the
         handing over of the securities, and that their           management company or the depositary company
         custody be entrusted to the depositary                   when these bodies are no longer capable of carrying
         company to the extent that their safekeeping             out: their duties.
         can be substantially assured by it;
(f) taking all necessary measures to ensure that                  2.     The statutory provisions or fund rules shall
     distributions are made in accordance with the                provide regulations to ensure the protection of the
     procedures laid down in the fund rules.                      unitholders where the management company or the
                                                                  depositary company is replaced.
                          Article 11
                                                                                           Article 15
1.     The depositary company shall either have its
registered office in the same Member State as the                 The assets of a unit trust shall not be made the
unit trust, or be established in, or at least have a              subject of any claim from persons other than the
place of business in that Member State if it has its              management company and the unitholders.
registered office in another Member State.
                                                                  In all cases claims by the management company or
                                                                  the unitholders shall only be met by assets of the
2.     The depositary company shall have sufficient
                                                                  unit trust where there are charges expressly attaching
paid up capital to enable it to perform its duties
                                                                  to these assets by statute or according to the fund
 effectively and meet its liabilities.
                                                                  rules.
                         Article 12                                                        Article 16
The depositary company shall be liable to the                     Member States shall take measures to ensure that the
management company and the unitholders for all                    assets of a unit trust are protected if the management
loss suffered by them as a result of its failure to               Company or the depositary company goes into
carry out or properly execute its duties. Liability               liquidation.
 ---pagebreak--- 26. 7. 76                           Official Journal of the European Communities                               No C 171/5
                      SECTION IV                               (d) taking all necessary measures to ensure that
                                                                   dividends are issued in accordance with the
OBLIGATIONS REGARDING THE STRUCTURE OF
                                                                   procedures laid down in the memorandum and
        INVESTMENT COMPANIES AND THEIR                             articles of association of the investment company.
               DEPOSITARY COMPANIES
                                                                                          Article 20
                        Article 17                              1.   The depositary company shall either have its
                                                               registered office in the same Member State as that of
The investment company shall have sufficient initial           the investment company, or be established in or at
paid up capital to enable it to carry on its business          least have a place of business in that Member State if
effectively.                                                   it has its registered office in another Member State.
                                                               2.    The depositary company shall have sufficient
                                                              paid up capital to enable it to carry on its business
                        Article 18                             effectively and to meet its liabilities.
The investment company shall not engage in
activities other than those referred to in Article 2. It                                 Article 21
shall be responsible for the management of its assets.
                                                               1.    The depositary company shall act in the sole
                                                               interest of the unitholders in its role as a depositary
                                                               company.
                       Article 19
                                                              2.     The depositary company shall be liable to the
1.    The safekeeping of transferable securities and           investment company for all loss suffered by the latter
liquid assets forming part of the assets of an                 as a result of its failure to carry out or properly
investment company shall be the responsibility of a           execute its duties. Any agreement which may exclude
depositary company which must hold them in                     or restrict this liability shall have no effect.
separate accounts. This rule shall also apply to all
other assets of the investment company the
safekeeping of which can be guaranteed to a great                                        Article 22
extent by the depositary company.
                                                              The same company shall not act as investment
                                                               company and depositary company.
2.    The depositary company shall moreover be
responsible for the following:
(a) taking all necessary measures to ensure the day-                                     Article 23
    to-day    administration     of   the    investment
    company's assets of which it is the trustee;               1.    The terms and conditions of replacement of the
                                                              depositary company shall be laid down by the
(b) taking all necessary measures to ensure that              relevant statute or the memorandum and articles of
     the sale, issue, repurchase, redemption and              association of the investment company. The statute
    cancellation of units by the investment company            shall provide that the competent authorities shall
    is carried out in accordance with statutory               demand the replacement of the depositary company
    provisions and with the memorandum and                    when this body is no longer capable of carrying out
    articles of association of the investment                 its duties.
    company;
(c) taking all necessary measures to ensure that:             2.     The statute or the memorandum and articles of
                                                              association of the investment company shall provide
    — securities sold on behalf of the investment             regulations to ensure the protection of unitholders
        company are handed over only in return for            where the depositary company is replaced.
        payment of the equivalent value which shall
        then be entrusted to its safekeeping,
    — payment for securities purchased on behalf of                                      Article 24
        the investment company shall be made only
        when these securities are handed over, the            Member States shall take all measures necessary to
        custody of the latter being entrusted to the          ensure that the assets of an investment company are
        depositary company to the extent that their            protected if the depositary company goes into
        safekeeping can be substantially assured by it;       liquidation.
 ---pagebreak--- N o C 171/6                          Official Journal of the European Communities                               26.7.76
                        SECTION V                              authorities or securities issued by public inter-
                                                                national organizations of which one or more Member
OBLIGATIONS CONCERNING THE INVESTMENT                           States are members.
                    POLICY OF CIUTS
                                                                                          Article 27
                          Article 25
                                                                1.     A CIUTS shall not invest more than 1 0 % of
                                                                its assets in units issued by other CIUTS.
1.     The assets of CIUTS shall consist solely of :
(a) transferable securities admitted to official stock          2.     Without prejudice to paragraph 1 hereof a unit
     exchange quotation in a Member State and                   trust shall not invest more than 5 ®/o of its assets in
    also those recently issued transferable securities          the units of other unit trusts managed by the same
    in the same category as those already admitted to           management company as its own, but should this
    official quotation, provided that the admission of          arise, the charging of further costs shall be
    the new transferable securities to official                 prohibited.
     quotation is applied for;
(b) transferable securities traded            on   another      3.     Subject to paragraph 2 hereof, if a CIUTS does
     regulated market of a Member State which                   invest part of its assets in the units of another
     operates regularly and is recognized and open to           CIUTS, any charging of further costs shall be shown
     the public;                                                in the periodical reports referred to in Article 31
                                                                hereof.
(c) transferable securities admitted to official stock
     exchange quotation in a non-Member State or
     traded on another regulated market of a non-                                         Article 28
     Member State which operates regularly and is
     recognized and open to the public, provided that
     the choice of this stock exchange or market has            A CIUTS shall not invest its assets in securities of a
     been approved by the competent authorities;                collective investment undertaking which is not
                                                                defined as a CIUTS for the purposes of this
 (d) liquid assets, including letters of credit which,           Directive. This rule, however, shall not apply to
     due to their rapid maturity and their guaranteed            securities issued by a closed investment company.
     realisation, rank as liquid assets.
 2.     However:                                                                          Article 29
 (a) a CIUTS may invest a maximum of up to 10 °/o
     of its assets in transferable securities other than         1.    A CIUTS shall not hold more than 5 % of the
     those referred to in paragraph 1;                           securities of the same category in an issuing body,
                                                                 and shall not dispose of more than 5 % of the total
 (b) Member States shall provide in their legislation
                                                                 votes attaching t o the securities of this issuing body
     that CIUTS may invest a maximum of up to 5 °/o
                                                                 by way of vote.
     of their funds in assets other than transferable
      securities and liquid assets.
                                                                 2.    Member States shall authorize the competent
                                                                 authorities to raise the limits provided for in
                          Article 26                             paragraph 1 hereof to a maximum of 10 °/o in
                                                                 exceptional cases.
 1.     A CIUTS shall not invest more than 5 % of its
 assets in transferable securities issued by the same            3.    Member States shall waive application           of
 body.                                                           paragraphs 1 and 2 hereof in the following cases:
                                                                 (a) transferable securities issued or guaranteed by a
 2.     Member States shall raise the limit laid down in
                                                                     Member State or its local authorities or
 paragraph 1 hereof to a maximum of 10 °/o only if
                                                                     transferable      securities    issued  by    public
 the total value of the transferable securities held by
                                                                     international organizations of which one or more
 the CIUTS in the issuing body in which it invests
                                                                     Member States are members;
 more than 5 ®/o of its assets does not exceed 40 °/o of
 the value of these assets.                                      (b) the holdings of a CIUTS in a company
                                                                     incorporated in a non-Member State which
 3.     Member States shall waive application of                     invests its assets mainly in securities of issuing
 paragraphs 1 and 2 hereby in the case of securities                 bodies having their registered office in that
 issued or guaranteed by a Member State or its local                 country, under whose legislation such a holding
 ---pagebreak---  26. 7. 76                           Official Journal of the European Communities                          No C 171/7
      establishes the only way the CIUTS can invest in                                  Article 32
      the securities of the issuing bodies in that
      country. This waiver shall, however, only apply           1.    The prospectus shall contain the information
      where the company in the non-Member State                 provided for in Schedule A annexed to this Directive.
      adheres to the limits laid down in Articles 26 (1),
      27 and 29 (1) hereof in its investment policy.
                                                                2.    The annual report shall contain the information
      Where the limits set in Articles 26 (1) and 27 are        provided for in Schedule B annexed to this Directive.
       exceeded, Article 30 shall apply mutatis
       mutandis;
                                                               3.     The half-yearly report shall contain the
  (c) the holdings of a CIUTS in subsidiary                     information provided for in Chapters I and II of
      companies carrying on          the business of            Schedule B annexed to this Directive.
      management, investment or marketing on its own
      behalf.                                                  If the CIUTS distributes dividends during the first
                                                               half of a financial year, the half-yearly report
                                                               relating to the period during which this distribution
                                                               is made shall also include the information provided
                         Article 30                            for in Chapter III of Schedule B annexed to this
                                                               Directive, concerning the revenue account for the
 The limits laid down in Articles 25 (2), 26 (1) and            reference period.
 (2) and 27 (1) and (2) may be exceeded on condition
 that any such excess stems from price variations in
 the assets of the CIUTS, or the exercise by the
 CIUTS of subscription rights attaching to the                                         Article 33
 securities which form its assets, or from any restraint
 on the part of the CIUTS, and on condition that the            1.    The fund rules or the memorandum and
 total value of this excess is not more than 1 0 % of          articles of association of the investment company
 the value of the assets of the CIUTS.                         which are an integral part of the prospectus shall be
                                                               annexed thereto.
                                                               2.     The documents mentioned in paragraph 1 need
                                                               not, however, be annexed to the prospectus provided
                       SECTION VI                              that in each Member State where the units are placed
                                                               on the market, they are readily available to the
 OBLIGATIONS CONCERNING INFORMATION TO                         public, free of charge, at the places mentioned in the
              BE SUPPLIED TO UNITHOLDERS
                                                               prospectus.
 A. Publication of a prospectus and periodical reports
                                                                                       Article 34
                                                               By way of derogation from Article 32:
                         Article 31
                                                               (a) the competent authorities shall permit a CIUTS
 1.     The CIUTS shall publish:                                   to dispense with the publication of certain
                                                                   particulars provided for in Schedules A and B
— a prospectus and two half-yearly reports, each
                                                                    annexed to this Directive where such particulars
      financial year,
                                                                    are unlikely to affect an assessment of the assets,
— an annual report.                                                financial position, performance and prospects of
                                                                    that undertaking;
2.      The annual and half-yearly reports shall be
                                                               (b) where the legislation of a Member State provides
published from the end of the period to which they
                                                                   for the detailed regulation of CIUTS situated in
refer within the following time limits:
                                                                   that State, the competent authorities shall permit
—• four months for the annual report,                              such undertakings to limit the information
                                                                   contained in the prospectus to data which is not
— two months for the half-yearly report.                           regulated by law.
3.      By way of derogation from paragraph 1 hereof,
the CIUTS shall not be obliged to publish the half-
yearly report relating to the second six-month period                                  Article 35
of the financial year if the annual report for that
financial year is published during the two-month               The essential elements of the prospectus must be
period.                                                        kept up to date.
 ---pagebreak--- N o C 171/8                         Official Journal of the European Communities                              26. 7. 76
                        Article 36                             exists and the places where it may be obtained by
                                                               the public.
1.    Member States shall specify the independent
persons or the bodies whose duty it is to verify the           2.    A CIUTS, and such marketing organizations
financial data contained in the annual reports.                and financial intermediaries as may be convened in
                                                               the issue or sale of the units or their distribution by
2.    Each annual report shall indicate precisely the          the stock exchange, shall not furnish any
person or body whose duty it is to verify the                  information likely to influence the assessment of the
                                                               units where such information is not contained in the
financial data.
                                                               prospectus or the periodical reports or is not
                                                               common knowledge.
                        Article 37
                                                                                    SECTION VII
1.    The CIUTS shall submit its prospectus and any
amendments thereto, as well as the annual and half-
yearly reports, for checking by the competent                         GENERAL OBLIGATIONS OF THE CIUTS
authorities, who shall have a period of one month in
which to make any comments. The CIUTS shall
take these comments into account. As far as the
prospectus is concerned, this check must be carried                                   Article 41
out prior to publication.
                                                               1.    A CIUTS shall not borrow.
2.    The competent authorities shall ensure that the
prospectus and the reports do not contain any
                                                               2.    Paragraph 1 notwithstanding, Member States
information or omissions which might mislead the
                                                               shall stipulate that the competent authorities may
public.
                                                               permit:
                                                               (a) CIUTS to borrow funds up to 10 °/o of the value
                                                                   of their assets for the repurchase or redemption
                        Article 38
                                                                   of their units or for the exercise of subscription
                                                                   rights, on condition that the funds borrowed are
1.    The prospectus, the most recent annual report                repaid within a short period and are not secured
and the subsequent interim report shall be sent free               by a charge on the assets of the CIUTS;
of charge to the potential subscriber either when he
is canvassed or at his own request.                            (b) investment companies to borrow funds to
                                                                   acquire buildings which are necessary in order to
2.    Moreover, the annual and half-yearly reports                 carry on their operations.
shall be made available to the public.
                                                                                      Article 42
         B. Publication of other information
                                                               1.    A CIUTS shall, at the request             of   the
                                                               unitholder, repurchase or redeem its units.
                        Article 39
                                                               2.    Paragraph 1 notwithstanding:
The CIUTS shall make public the issue, sale,
repurchase or redemption price of its units each time          (a) a CIUTS shall, in cases provided for by statute,
it issues, sells, repurchases or redeems them, and at              the fund rules or the memorandum and articles
least twice a month. The competent authorities shall,              of association of the investment company,
however, permit a CIUTS to reduce the frequency to                 suspend the repurchase or redemption of its
once a month on condition that this derogation does                units. The terms and conditions of this
not prejudice the interests of the unitholders.                    suspension shall be laid down in the fund rules
                                                                   or in the memorandum and articles of association
                                                                   of the investment company;
                        Article 40                             (b) the competent authorities shall demand in the
                                                                   interest of the unitholders or in the public
1.    All publicity involving an invitation to purchase            interest the suspension of the repurchase or
units of a CIUTS shall indicate that a prospectus                  redemption of its units by a CIUTS.
 ---pagebreak--- 26. 7. 76                            Official Journal of th^ European Communities                           No C 171/9
3.    In the cases mentioned in paragraph 2 (a), the            2.    By way of derogation from paragraph 1,
CIUTS shall inform the competent authorities                    Member States shall provide that the competent
without delay of its decision.                                  authorities may authorize a CIUTS to make loans to
                                                                undertakings of up to 5 °/o of the value of its assets,
                                                                provided that these are short term loans only. This
                                                                authorization shall be given in each case, and prior
                        Article 43                              to the making of the loan.
The methods of asset valuation and the methods of
calculation of the sale or issue price and the                                           Article 48
repurchase or redemption price of the units of a
CIUTS shall be indicated in the fund rules or in the            A CIUTS shall not carry out transactions of a
memorandum and articles of association of the                   speculative nature, such as open dealings in
investment company.                                             transferable securities.
                                                                                         Article 49
                        Article 44
                                                                1.    A CIUTS shall only carry out transactions in
1.    The income received by a CIUTS shall either               the transferable securities referred to in Article 25 (1)
be distributed to unitholders or reinvested in                  which are or shall be part of its assets on the official
accordance with provisions which shall be laid down             market of a stock exchange or on another regulated
in the fund rules or in the memorandum and articles             market which operates regularly and is recognized
of association of the investment company.                       and open to the public.
Distribution of income should take place at least               2.    Paragraph 1 notwithstanding, a CIUTS shall
once a year. In the case of reinvestment of income,             carry out transactions outside the markets referred to
unitholders shall be informed at least once a year of           in that paragraph if they are carried out at a price
the amount reinvested.                                          which is more profitable to the unitholders than that
                                                                which might have been obtained on these markets
2.    The net gains realized from the sale of the               had the transaction been carried out thereon.
assets of the CIUTS shall be distributed where such
distribution is laid down by statute and is provided            3. , Where a CIUTS carries out transactions in the
for by the fund rules or the memorandum and                     securities referred to in Article 25 (2), the price on
articles of association of the investment company.              the basis of which these transactions are carried out
                                                                shall be certified by an expert approved by the
3.    Unrealized gains shall not be distributed.                competent authorities.
                                                                                         Article 50
                        Article 45
                                                                The following persons shall not act as party to
The units of a CIUTS shall not be issued unless the             transactions effected for the account of a CIUTS:
cash equivalent to the net issue price is
simultaneously paid into the funds of the CIUTS.                — the management company and the depositary
                                                                    company,
This provision shall not preclude the distribution of          — the directors and staff of these companies or of
bonus units.                                                        the investment company,
                                                               — subsidiaries of the management company or
                                                                    depositary company,
                        Article 46
                                                                — the investment advisers of the management
                                                                    company, the investment company, or the
All the units of a CIUTS shall carry equal rights.
                                                                    depositary company,
                                                               — any persons holding more than 10°/o of the
                                                                    voting rights in the management company,
                        Article 47                                  investment company or depositary company.
1.    Without prejudice to Article 25 (1) (d), a               They shall not so act unless such transactions
CIUTS shall neither grant loans nor act as a                   concern transferable securities and have been carried
guarantor.                                                     out;
 ---pagebreak--- No C 171/10                          Official Journal of the European Communities                                26. 7. 76
(a) at a price which is equal to or more                        it shall inform the competent authorities as well as
    advantageous for the unitholders than the price             the authorities of the other Member State of its
    of the official quotation on the stock exchange, if         intention.
    the said transferable securities have been
    admitted to quotation;                                      2.     In the case referred to in paragraph 1, the
                                                                CIUTS shall provide in this other Member State a
(b) at a price which is equal to or more                        financial service through which unitholders may
    advantageous for the unitholders than that                  exercise their rights.
    observed on any other regulated market which
    operates regularly and is recognized and open to
    the public, if the transferable securities involved
    have been traded on this market;                                                     Article 55
(c) at the price calculated in accordance with the              1.     By way of derogation from Article 1 (2), a
    rules laid down by the fund rules or the                    Member State shall apply its own marketing
    memorandum and articles of association of the               regulations to CIUTS situated in other Member
    investment company in the case of transferable              States and marketing or intending to market their
    securities other than those referred to in                  units within its territory.
    subparagraphs (a) and (b);
(d) at the issue price to the public for new issues in          2.     For the purposes of paragraph 1, the term
    respect of which the depositary company acts as             'marketing regulations' shall cover the following:
    an intermediary.                                            (a) the rules relating to entries in trade registers;
                                                                (b) the rules relating to sales promotion;
                        Article 51 -
                                                                 (c) the rules relating to unfair competition;
A CIUTS shall place at the disposal of each                     (d) the rules relating to         canvassing    or    other
unitholder a document confirming his rights over its                 marketing techniques;
assets.
                                                                 (e) the rules governing the various forms of savings
                                                                     plan.
                        Article 52
                                                                3.     The marketing regulations referred to in
The fund rules or the memorandum and articles of                paragraph 1 shall be applied in a non-discriminatory
association of the investment company shall indicate            manner and shall not have imposed on CIUTS
categories of costs chargeable to the unitholders.              situated in other Member States stricter conditions
                                                                than those set out in this Directive.
                        Article 53
1.    The competent authorities shall ensure that the                                    Article 56
name of a CIUTS cannot mislead the public.
                                                                A CIUTS shall be able to carry out the marketing of
2.    Member States shall take necessary measures to
                                                                its units in a Member State other than that in which
prevent undertakings which are not regarded as
                                                                it is situated through a sales office situated in that
CIUTS, as defined in this Directive, from using^
                                                                Member State. The setting up of this office shall not
names which might lead the public to believe that
                                                                 be dependent on the approval of the authorities of
those undertakings come within the scope of this
                                                                that Member State.
Directive.
                      SECTION VIII                                                       Article 57
     SPECIAL PROVISIONS APPLICABLE TO CIUTS
     WHICH MARKET THEIR UNITS IN MEMBER                          1.    If a CIUTS markets its units in a Member State
STATES OTHER THAN THOSE IN WHICH THEY                           other than that in which it is situated, it shall
                     ARE SITUATED                               distribute in this other Member State, in at least one
                                                                official language of the said Member State, the
                                                                documents and information which shall be published
                        Article 54                              in the Member State in which it is situated, in
                                                                accordance with the same terms and conditions as
1.    If a CIUTS intends to market its units in a               those provided for in the Member State of
Member State other than that in which it is situated,           distribution.
 ---pagebreak--- 26. 7. 76                            Official Journal of the European Communities                         N o C 171/11
2.    By way of derogation from paragraph 1, a                                          Article 60
CIUTS which is granted permission in accordance
with Article 34 (b) shall, if it markets its units in a         1.    The competent authorities shall state the
Member State other than that in which it is situated,           reasons behind all decisions rejecting applications for
 publish in this other Member State a prospectus in             authorization and shall communicate these reasons
 accordance with Article 32 (1).                                to the applicant.
                                                                2.    Member States shall provide for a right of
                                                                appeal at law against all rejections.
                       SECTION IX
                                                                3.    Where an application for authorization which
                                                                was properly presented has not been acted upon by
    PROVISIONS CONCERNING THE COMPETENT
                      AUTHORITIES                               the competent authorities within three months from
                                                                the date of receipt thereof, provision shall also be
                                                                made for a right of appeal at law.
                        Article 58
                                                                                       Article 61
 1.    Member States shall designate the competent              1.    Member States shall specify such measures,
authorities who shall assume the responsibilities              including     the   possibility    of  withdrawal     of
conferred upon them by this Directive. They shall               authorization, which the competent authorities
inform the Commission thereof and shall specify any             referred to in Article 58 (1) may take with regard to
sharing responsibility.                                         a CIUTS which has violated statutory provisions,
                                                                regulations or administrative actions, or the fund
                                                                rules or the memorandum and articles of association
The competent authorities shall supervise the                   of the investment company.
activities of CIUTS situated in their national
territory, throughout the Community, and shall, in             2.     Member States shall specify such measures
particular, ensure that the rules laid down in this            which the authorities referred to in Article 58 (3)
Directive are respected, subject to the provisions of          shall take with regard to a CIUTS which has
paragraph 3.                                                    violated the rules laid down in Articles 54 (1) and
                                                                55 (1).
2.    The competent authorities referred to in
                                                               3.     All decisions taken by the authorities pursuant
Articles 5, 9 (1), 14 (1), 42 (3), 53 (1), 60 (1) and (3),
                                                               to the preceding paragraphs shall state the reasons
61 (4), 62 and 67 (3) shall be state authorities.
                                                                on which they are based and shall be communicated
                                                               to the CIUTS.
3.    If recourse is had to the power provided in
Article 55 (1), then the authorities responsible for           Member States shall provide for a right of appeal at
supervising the observance of the               marketing      law against such a decision.
regulations referred to therein shall be those of the
Member State in which the units are marketed.                  4.     All decisions to withdraw their approval shall
                                                               be communicated without delay by the competent
                                                                authorities of the Member State in which the CIUTS
4.    The competent authorities shall be granted all           in question is situated to the authorities of the other
powers, including those of supervision, necessary to           Member States in which the units of this CIUTS are
carry out their task. In particular, they shall have the       marketed.
power to carry out on-the-spot investigations and to
require the CIUTS concerned to provide any
information or documents they may need in order to
                                                                                       Article 62
carry out their task.
                                                               1.     The winding up of a CIUTS shall be carried
                                                               out under the supervision of the competent
                        Article 59                             authorities in accordance with the regulations laid
                                                               down by national legislation.
The competent authorities of Member States shall               2.     The competent authorities shall have all the
collaborate closely in order to carry out their task           necessary powers in order to ensure that the interests
and shall for this purpose communicate to each                 of unitholders are protected. Without prejudice to
other all information requested.                               the powers conferred upon courts in such a matter,
 ---pagebreak--- N o C 171/12                       Official Journal of the European Communities                               26. 7. 76
Member States shall authorize the competent                   3.     The transferable securities and liquid assets
authorities to appoint liquidators or to have them            which are part of the assets of the companies
appointed by the courts.                                      referred to in Article 63 shall be kept in a special
                                                              account at one or more credit institutes. This rule
3.     The winding up shall not be carried out in a           shall also apply to all assets the safekeeping of which
discriminatory manner with regard to unitholders              can be substantially assured by a credit institute.
from other Member States.
                                                                                      SECTION XI
                      SECTION X
                                                                                LIAISON COMMITTEE
SPECIFIC PROVISIONS RELATING TO INVESTMENT
      COMPANIES WHICH MARKET THEIR UNITS
EXCLUSIVELY THROUGH ONE OR MORE STOCK
                      EXCHANGES                                                        Article 66
                                                                      A Liaison Committee shall be set up at the
                                                               Commission. The task of this Committee shall be:
                        Article 63
                                                               (a) to facilitate, without prejudice to Articles 169
                                                                   and 170 of the Treaty, the harmonized
 Investment companies which market their units                     implementation of this Directive through regular
 exclusively through one or more official stock                     consultation relating in particular to practical
 exchanges to whose official quotation the units are
                                                                    problems of implementation;
 admitted shall not be required t o have a depositary
 company within the meaning of this Directive.                 (b) to facilitate consultation between Member States
                                                                    as regards the stricter or supplementary
 The provisions of this Directive which relate to the               requirements and the marketing rules which they
 depositary company and its managers shall not                      are free to apply in accordance with Articles 1 (3)
 therefore apply to these companies.                                and 55 (1) of this Directive;
                                                               (c) to advise the Commission, if necessary,            on
                                                                    additions or amendments to this Directive.
                        Article 64
                                                               2.     The Liaison Committee shall be composed of
 The provisions of Article 42 shall not apply to the           representatives     of    the    Member    States     and
 investment companies referred to in Article 63.               representatives of the Commission. It shall be
 However, these companies shall, if necessary,                 presided over by a representative of the Commission.
 intervene on the market to prevent the quotation of           The secretariat shall be provided by the Commission.
 their units from deviating more than 5 *Vo from their
 net asset value. The competent authorities shall in           3.     The Committee shall be convened by the
 exceptional cases exempt these companies from this            chairman either on his own initiative or at the
  latter requirement.                                          request of one of its members.
                        Article 65
                                                                                      SECTION XII
  1.    The provisions of Articles 39 and 43 shall not
  apply to the investment companies referred to in              TRANSITIONAL PROVISIONS, DEROGATIONS AND
  Article 63.                                                                     FINAL PROVISIONS
  2.     The methods of asset valuation and calculation
  of the net asset value of the units of the companies
  referred to in Article 63 shall be set out in the                                     Article 67
  memorandum or articles of association of these
  companies. The net asset value shall be established           1.    By way of derogation from Article 8, Member
  and published at least twice a week, and its                  States shall authorize management companies to
  calculation must be certified as correct by an                issue bearer certificates representing registered
  independent auditor,                                          securities of other companies,
 ---pagebreak--- 26. 7. 76                           Official Journal of the European Communities                       No C 171/13
2.     Member States shall authorize management                may be increased under the conditions set out in
 companies which, at the time of notification of this          Article 30.
 Directive, are also involved in activities other than
 those provided for in Article 8 to continue these
 activities provided they do not harm the interests of                                Article 70
 unitholders.
                                                               1.    Articles 41 and 46 shall not apply to CIUTS
3.     If, in the case referred to in paragraph 2, the        whose fund rules or memorandum and articles of
management company is a credit institute or an                association included on 1 January 1976 provisions
 insurance company, it need only, notwithstanding             enabling loans to be granted for investment and
 Article 9 (1), inform the competent authorities of the       which, during the two years preceding January 1976,
 name of any shareholder holding a number of                  actually made use of these provisions.
securities to which are attached voting rights in
 excess of 5 %> of the total votes attaching to its own       2.     The fact that loans may be granted shall be
 securities.                                                   clearly indicated in the prospectus.
4.     Article 9 (2) shall not apply to the management        3.     However, the amount of the loans contracted
 companies referred to in paragraph 3.                        under paragraph 1 shall not exceed 15 ®/o of the
                                                              amount of the assets of the CIUTS.
                         Article 68
                                                                                      Article 71
Member States shall allow CIUTS whose depositary
companies do not comply with the conditions in                Member States shall bring the laws, regulations and
Articles 11 (1) and 20 (1) at the time of the                 administrative provisions necessary to comply with
notification of this Directive a period of five years         this Directive into force within a period of 12
from the date of entry into force of this Directive to        months from the date of its notification and shall
comply with these conditions.                                 inform the Commission immediately thereof.
                         Article 69                                                   Article 72
1.     Member States shall authorize CIUTS which,
                                                              Member States shall ensure that the Commission is
at the time of the notification of this Directive,
                                                              notified of the text of essential provisions
exceed the limits laid down in Articles 26, 27 and 29
                                                              subsequently adopted under national law in the
to continue exceeding these limits, provided that the
                                                              fields covered by this Directive.
total value of the resulting excess margins is not
greater than 1 0 % of the value of the assets of the
CIUTS.
                                                                                      Article 73
2.     The excess margins referred to in paragraph 1
relating to the limits laid down in Articles 26 and 27        This Directive is addressed to the Member States.
 ---pagebreak--- N o C 171/14                               Official Journal of the European Communities                                       26. 7. 76
                                                             SCHEDULE A
                                          Information to be included in the CIUTS prospectus
                  A. Regarding unit trusts                                           B. Regarding investment companies
           Unit trusts in general                           Management company
1.    General data                               1.    General data                           1.     General data
11.   General characteristics                    11.   General characteristics                11.    General characteristics
11.1. Name.                                      11.1. Name or style, registered office        11.1. Name or style, registered office
                                                       and the principal headquarters                and the principal headquarters
                                                       if this differs from the registered           if this differs from the registered
                                                       office.                                       office.
11.2. Dates of creation and of the               11.2. Duration, if limited.                   11.2. Dates of the company's incor-
      first sale of units to the public.                                                             poration and of the first sale
       Indicate the duration, if limited.                                                            of units to the public. Indicate
                                                                                                     the duration, if limited.
                                                 11.3. If the company manages other
                                                       unit trusts or has other
                                                       business, indication of the other
                                                       trusts and activities.
11.4. Indication of the place where                                                            11.4. Indication of the place where
      the fund rules and periodical                                                                  the memorandum and articles
      reports may be consulted.                                                                      of association and periodical
                                                                                                     reports of the company may
                                                                                                     be consulted.
11.5. Brief indications relevant to                                                            11.5. Brief indications relevant to
      unitholders of the taxation of                                                                 unitholders of the taxation of
      the fund. Details of whether                                                                   the company. Details of whether
      deductions are made at source                                                                  deductions are made at source
      from the income and capital                                                                    from the income and capital
      gains paid by the fund to                                                                      gains paid by the company to
      unitholders.                                                                                   unitholders.
11.6. Accounting        and    distribution                                                    11.6. Accounting       and   distribution
      dates.                                                                                         dates.
 ---pagebreak--- 26. 7. 76                               Official Journal of the European Communities                                    No C 171/15
                   A. Regarding unit trusts                                         B. Regarding investment companies
            Unit trusts in general                        Management company
                                               12.   Management and auditing                  12.   Management and auditing
                                               12.1. Name and position of the                 12.1. Name and position of the
                                                     undermentioned persons within                  undermentioned persons within
                                                     the company, with details of                   the company, with details of
                                                     their main activities outside the              their main activities outside the
                                                     company (viz. relevant director-               company (viz. relevant director-
                                                     ships and main duties in other                 ships and main duties in other
                                                     companies):                                    companies):
                                                     — members of the Board of                      — members of the Board of
                                                         Directors, the Supervisory                     Directors, the Supervisory
                                                         Board and the Managing                         Board and the Managing
                                                         Board, partners and man-                       Board, partners and man-
                                                         agers and other persons                        agers and other persons
                                                         responsible for management                     responsible for management
                                                         at a senior level,                             at a senior level,
                                                     — founders, if they still have                 — founders, if they still have
                                                         responsibilities vis-a-vis the                 responsibilities vis-ci-vis the
                                                         management company.                            investment company.
                                               13.   Company     capital
                                               13.1. Paid-up capital plus statutory
                                                     and voluntary reserves (as per
                                                     latest balance sheet).
                                                                                             13.2. In the event of an authorized
                                                                                                    capital, indication       of    the
                                                                                                    amount.
                   A. Regarding unit trusts                                         B. Regarding investment companies
13.3. Details of the types and main characteristics of the             13.3. Details of the different types and main characteristics
       units, in particular:                                                  of the units and in particular:
       — the nature of the right (e.g. real, personal or                      — original securities or certificates providing
           other title) represented by their unit,                                evidence of title; entry in a register or in an
                                                                                  account,
      — original securities or certificates providing
           evidence of title; entry in a register or in an                    — characteristics of the units: registered or bearer.
           account,                                                               Indication of denomination in the latter case,
       — characteristics of the units: registered or bearer.                  — indication of unitholders' voting rights,
           Indication of denomination in the latter case,
                                                                              — circumstances in which winding-up can be
      — indication of unitholders' voting rights if these                         decided by the investment company and winding-
          exist,                                                                  up procedure, in particular as regards the rights
                                                                                  of unitholders.
      — circumstances in which winding-up can be
          decided by the unit trust and winding-up
          procedure, in particular as regards the rights of
          unitholders.
 ---pagebreak--- N o C 171/16                          Official Journal of the European Communities                                  26. 7. 76
                  A. Regarding unit trusts                                   B. Regarding investment companies
13.4. Indication of stock exchanges or markets where the         13.4. Indication of stock exchanges or markets where
       units are quoted.                                                the units are quoted.
14. Procedures and conditions of issue of units                  14. Procedures and conditions of issue of units
14.1. Continuous or block issues.                                14.1. Continuous or block issues.
14.2. Issue or sale by the unit trust, by a marketing            14.2. Issue or sale by the investment company, by a
       organization, through an intermediary, through the               marketing organization, through an intermediary,
       stock exchange or another market.                                through the stock exchange or another market.
14.3. Number of units or duration of issue.                      14.3. Number of units or duration of issue.
14.4. Circumstances in which issue or sale may be                14.4. Circumstances in which issue or sale may be
       suspended.                                                       suspended.
15.    Conditions and procedures for repurchase or               15.     Terms and conditions for repurchase or redemption
       redemption of units and circumstances in which                    of units and circumstances in which repurchase or
       repurchase or redemption may be suspended                        redemption may be suspended
16. Outline of distribution rules                                16. Outline of distribution rules
16.1. Distribution or reinvestment of profits.                   16.1. Distribution or reinvestment of profits.
16.2. Precise description of methods used for determining        16.2. Precise description of methods used for determining
       net profit and sums available for distribution                    net profit and sums available for distribution
        (whether capital gains or losses taken into account,             (whether capital gains or losses taken into account,
       whether a revenue equalization account is employed,              whether a revenue equalization account is employed,
       method of charging fees and costs).                               method of charging fees and costs).
 16.3. Details of whether the profit is distributed in full       16.3. Details of whether the profit is distributed in full
       or only in part and in the latter case names of the               or only in part and in the latter case names of the
       bodies having authority to take the relevant                      bodies having authority to take the relevant
       decisions.                                                        decisions.
 16.4. Form of the distribution of profits (in cash or units).    16.4. Form of the distribution of profits (in cash or units).
2.      Business policy                                           2.     Business policy
20. Description of business policy aims and techniques            20. Description of business policy aims and techniques
 20.1. Object of the fund, e.g. aims for income, capital          20.1. Object of the company, e.g. aims for income,
        growth, etc.                                                     capital growth, etc.
 ---pagebreak---  26. 7. 76                                   Official Journal of the European Communities                                       N o C 171/17
                      A. Regarding unit trusts                                              B. Regarding investment companies
 20.2. Orientation of the fund's investment policy                             20.2. Orientation of the company's investment policy
          (particular specialization or spread in geographical                          (particular specialization of spread in geographical
          terms or as to industry).                                                    terms or as to industry).
 20.3. Limitations and obligations on investment policy.                      20.3. Limitations and obligations on investment policy.
20.4. Indication of specific techniques, such as contracting                  20.4. Indication of specific techniques, such as contracting
          of debts or option dealings which are permissible                            of debts or option dealings which are permissible
         in the management of the assets.                                             in the management of the assets.
 21.     Main rules for valuation of assets                                   21.     Main rules for valuation of assets
22.      Determination of the sale or issue price and the                     22.     Determination of the sale or issue price and the
         repurchase or redemption price of units,                                     repurchase or redemption price of units (*),
         in particular:                                                               in particular:
         —• frequency of calculation of the sale or issue                            — frequency of calculation of the sale or issue
             price and the repurchase or redemption price,                                price and the repurchase or redemption price,
         — details of charges and commissions of all kinds,                          — details of expenses and commissions of all kinds,
             including taxes relating to sales or issues and                              including taxes relating to sales or issues and
             redemption or repurchase,                                                    redemption or repurchase,
         — method, place and frequency of publication of                             — method, place and frequency of publication of
             these prices.                                                                these prices.
23.      Remunerations payable to the                  management             23.    Remunerations payable to the directors, the
         company, the depositary company or            third parties                 depositary company or to third parties by the
         by the fund and refunds of costs to the       management                    company and refunds of costs to the directors, the
         company, the depositary company or            third parties                 depositary company or to third parties.
         by the fund.
(') For the investment companies referred to in Article 63 of the Directive, this heading is hereby replaced by the following:
    22. Method and frequency of calculation of the net asset value of the shares. Method, place and frequency of publication of
        this value.
                  3.   Information concerning the depositary company of unit trusts and investment companies
                  3.1. Name or style, registered office and the principal headquarters if this differs from the
                       registered office.
                  3.2. Elements of the contract with the management company or the investment company not
                       arising from statutory provisions, fund rules or memorandum and articles of association
                       of the investment company, and relevant to the unitholders.
                  3.3. Main activity.
                  4.   Information concerning investment advisers of unit trusts and investment companies
                  4.1. Name or style.
                  4.2. Elements of the contract with the management company or the investment company
                       which may be relevant to the unitholders.
                  4.3. Other significant activities.
 ---pagebreak--- N o C 171/18                          Official Journal of the European Communities                                  26. 7. 76
                                                         SCHEDULE B
                                     Information to be included in the periodical reports
              I. Statement of assets and liabilities
                 The following items shall be shown separately:
                 (a) transferable securities.
                      Particulars of transferable securities shall be given in the form of a table with a
                      separate line for each different type of security. Transferable securities must also be
                      analysed according to one or more of the following criteria:
                      — nature of the security (shares, bonds or debentures, convertible bonds, etc.),
                      — relevant situation (country of issuer, country of quotation, etc.),
                      — economic sector,
                      — currency.
                      For each security mentioned above the following must be stated:
                      — number or total nominal value,
                      — total value determined in accordance with the valuation rules laid down by
                          statutory provisions, fund rules or the memorandum and articles of association of
                          the investment company. The total value shall be expressed in the currency of
                          the CIUTS,
                      — proportion in relation to the total assets of the CIUTS.
                 (b) Deposits with banking institutes.
                 (c) Dividends and interest receivable, where not already included in the valuation of assets
                      under (a), (b) and (e).
                 (d) Other amounts receivable.
                  (e) Other assets.
                      The following particulars shall be given for each asset:
                      — description and value,
                      — proportion in relation to the total assets of the CIUTS.
                  (f) Loans obtained, indicating the purpose, the currency of the loan, the rate of interest
                      and the term.
                  (g) Other amounts payable.
                  (h) Value of net assets.
                  (i) The number of units in circulation.
             II. Notes on the statement of assets and liabilities
                  (a) Transferable securities not admitted to an official stock exchange quotation shall be
                      identified as such.
                  (b) Where the price used for transferable securities is not an official quotation, the market
                      referred to or the criteria used for valuation shall be specified.
                  (c) Where the free negotiability of securities is restricted by statutory or contractual
                      requirements, this shall be stated, and the criteria used for valuation shall be indicated.
                  (d) Contingent tax liabilities, particularly those relating to capital gains, shall be mentioned,
                      indicating how far these taxes have been taken into account in determining the position
                      of the CIUTS.
                  (e) Transactions in progress (such as conditional operations) on the date when the
                      statement of assets and liabilities of the CIUTS is drawn up which are relevant from
                      the point of view of assets shall be shown.
 ---pagebreak--- 26. 7. 76                            Official Journal of the European Communities                             N o C 171/19
               (f) Amounts to be received or to be paid by the CIUTS under the heading of forward
                   exchange transactions in progress on the date when the statement of assets and
                   liabilities of the CIUTS is established shall be listed in foreign currency; these amounts
                   shall be expressed in the relevant foreign currency with an indication of their equivalent
                   value in the currency of the Member State where the CIUTS is situated. Foreign
                   currency shall include currencies other than those in which the CIUTS accounts
                   are kept.
          III. Revenue account for the reference period
               The following items shall be shown separately:
               (a) Dividends on shares:
                   — in cash,
                   — in securities, where such dividends are considered as income.
               (b) Interest on bonds (including lottery draws and premiums).
               (c) Other income (including subscription rights, bonus issues and warrants).
               (d) Appreciation in value where brought to the revenue account.
               (e) Balance of the revenue equalization account, if such an accounting system is used.
               (f) Management costs where charged to the revenue account.
               (g) Custody charges where charged to the revenue account.
               (h) Financial charges and, in particular, interest paid on loans.
               (i) Depreciation in value where charged to the revenue account.
               (j) Taxes.
               (k) Net amount of revenue.
               Items falling under headings (f) and (g) shall be apportioned, if these costs are invoiced
               separately, according to nature or according to persons making the charge. An
               apportionment shall not be required when the CIUTS pays only lump sums to those
               persons.
          IV. Changes in capital account during the reference period
               The following items shall be shown separately:
               (a) Value of net assets at the beginning of the period.
               (b) Total amount of capital from sale or issue of units and purchase or redemption of
                   units.
               (c) Management costs where charged to the capital account.
               (d) Custody charges where charged to the capital account.
               (e) Appreciation or depreciation in capital value since the beginning of the period.
               (f) Value of the net assets at the end of the period.
               Items falling under headings (e) and (d) shall be apportioned, if these costs are invoiced
               separately, according to nature or according to persons making the charge. An apportion-
               ment shall not be required when the CIUTS pays only lump sums to those persons.
 ---pagebreak--- N o C 171/20                             Official Journal of the European Communities                                            26. 7. 76
               V. Transactions carried out during the reference period (l)
                    The following transactions shall be shown:
                     (a) Sales and purchases of transferable securities during the reference period shall be shown
                          in terms of number or total nominal value. Where transactions are not the result of a
                          decision of the CIUTS (for example scrip issues) these shall be shown separately.
                     (b) For each security referred to in paragraph I (e) the gross sale or purchase price.
                     (c) Transactions referred to in paragraph II (e) which have been settled during the period,
                          unless they have given rise to a sale or purchase included in the statement referred
                          to in (a) above.
              (x) This information does not have to be included in the annual report if it has been published in the half-yearly
                  report.
             Proposal for a Council Regulation (ECSC, EEC, Euratom) amending the Financial
             Regulation of 25 April 1973 applicable to the general budget of the European
                                                              Communities
                                (Submitted by the Commission to the Council on 26 May 1976)
 THE COUNCIL OF THE EUROPEAN COMMUNITIES,                                  amending the provisions concerning transfers to
                                                                          reflect the fact that the European Parliament makes
                                                                          the final decision on transfers relating to expenditure
Having regard to the Treaty establishing the
                                                                          which does not necessarily result from the Treaties
European Coal and Steel Community, and in
                                                                          or from Acts adopted in accordance therewith;
particular Article 78f thereof,
                                                                          Whereas the Treaty of 22 July 1975 established a
Having regard to the Treaty establishing the                              Court of Auditors which replaces the Audit Board
European Economic Community, and in particular                            and the Auditor of the European Coal and Steel
Article 209 thereof,                                                      Community; whereas the Court of Auditors should
                                                                          have the same status as an institution in matters
                                                                          concerning the establishment and implementation of
Having regard to the Treaty establishing the                              the budget, and whereas the provisions covering the
European Atomic Energy Community, and in                                  jurisdiction and powers of the Court of Auditors
particular Article 183 thereof,                                           should be reviewed once the Court has been
                                                                          constituted;
Having regard to the proposal from the Commission,
                                                                          Whereas there should be conferred upon all the
                                                                          institutions the right to apply the practices current in
Having regard to the opinion of the European                              some of the institutions in respect of the
Parliament,                                                               implementation of their budgets, and whereas in
                                                                          particular all the institutions should be empowered
Whereas the Treaty of 22 July 1975 amended certain                        to effect themselves any necessary transfers within
budgetary provisions of the Treaties establishing the                     their own budget section; whereas in respect of the
European     Communities             and   of     the    Treaty           Guarantee Section of the European Agricultural
establishing a Single Council and a Single                                Guidance and Guarantee Fund the Commission
Commission for the European Communities; and                              should — because of the requirement that the
whereas, in the light of these amendments, changes                        accounts be closed on 31 March — be empowered to
need to be made to the provisions of the Financial                        carry out between 1 January and 31 March of the
Regulation relating to the adoption of the budget                         subsequent financial year any transfers between,
 and the measures to be taken if, at the beginning of                      chapters that may be required; whereas, pursuant to
a budget year, the budget has not yet been adopted;                       the provisions of Regulation (EEC) N o 2681/74, it is
                                                                          essential that the Commission should be empowered
                                                                         to make transfers as necessary between chapters of
Whereas account should also be taken of the                               the Guarantee Section of the European Agricultural
changed distribution of the powers of the two                             Guidance and Guarantee Fund and the Food Aid
institutions which hold the budgetary authority by                        chapter;