Undertakings for Collective Investment in Transferable Securities Directive 2009
WHAT IS THE UNDERTAKING FOR COLLECTIVE INVESTMENT IN TRANSFERABLE SECURITIES
It is a an investment fund that invests in liquid assets and can be distributed publicly to retail investors across the EU. The UCITS Directive, originally adopted in 1985, allows these funds to be freely tradable across the EU based on the regulatory authorisation of one member state.
While the original legislation did not achieve the intended outcomes, there have been several iterations since, with the latest (UCITS V), being adopted by the EU in 2014.
Every UCITS must designate a depositary and a management company, both of which are then subject to rigorous regulations around oversight, reporting and investment management, including items around instrument eligibility and external reporting. The latest UCITS Directive includes rules on UCITS management company remuneration and an enhanced liability regime for depositaries.