S.I. No. 212/2003 - European Communities (Undertakings For Collective Investment in Transferable Securities) (Amendment) Regulations 2003
Arrangement of Regulations
Regulation
1.
Citation.
2.
Interpretation.
3.
Transitional arrangements for UCITS authorised on or before 13 February 2002.
4.
Transitional arrangements for UCITS authorised after 13 February 2002.
5.
Amendment of Regulation 2(1) of the Principal Regulations.
6.
Amendment of Regulation 3 of the Principal Regulations.
7.
Amendment of Regulation 45 of the Principal Regulations.
8.
Amendment of Regulation 46 of the Principal Regulations.
9.
Deletion of Regulation 47 of the Principal Regulations.
10.
Amendment of Regulation 48 of the Principal Regulations.
11.
Insertion of new Regulations after Regulation 48 of the Principal Regulations.
12.
Amendment of Regulation 49 of the Principal Regulations.
13.
Insertion of new Regulation after Regulation 49 of the Principal Regulations.
14.
Amendment of Regulation 50 of the Principal Regulations.
15.
Amendment of Regulation 51 of the Principal Regulations.
16.
Amendment of Regulation 52 of the Principal Regulations.
17.
Amendment of Regulation 54 of the Principal Regulations.
18.
Amendment of Regulation 55 of the Principal Regulations.
19.
Amendment of Regulation 56 of the Principal Regulations.
20.
Amendment of Regulation 57 of the Principal Regulations.
21.
Amendment of Regulation 71 of the Principal Regulations.
22.
Amendment of Regulation 72 of the Principal Regulations.
23.
Amendment of Schedule 1 B of the Principal Regulations.
European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2003
I, Mary Harney, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving further effect to Council Directive No. 85/611/EEC of 20 December 19851 , as amended by Council Directive No. 88/220/EEC of 22 March 19882 , European Parliament and Council Directive No. 95/26/EC of 29 June 19953 European Parliament and Council Directive No. 2001/108/EC of 21 January 20024 hereby make the following regulations:
Citation.
1. These Regulations may be cited as the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2003.
2. In these Regulations—
“Amended Regulations” means the Principal Regulations as amended by these Regulations.
“Principal Regulations” means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (S.I. No. 211 of 29 May 2003);
“Unamended Regulations” means the Principal Regulations as they stood prior to the commencement of these Regulations.
Transitional arrangements for UCITS authorised on or before 13 February 2002.
3. (1) This Regulation applies to UCITS authorised on or before 13 February 2002.
(2) A UCITS to which this Regulation applies shall operate under the Unamended Regulations up to and including 12 February 2007.
(3) Notwithstanding paragraph (2), a UCITS to which this Regulation applies may operate under the Amended Regulations, provided that the UCITS has obtained approval from the Bank to so operate.
(4) Notwithstanding paragraph (2), a UCITS to which this Regulation applies which is an umbrella fund may apply to the Bank to establish an additional sub-fund which sub-fund may operate under the Amended Regulations.
(5) As and from 13 February 2007 all UCITS to which this Regulation applies shall operate under the Amended Regulations.
Transitional arrangements for UCITS authorised after 13 February 2002.
4. (1) This Regulation applies to UCITS authorised after 13 February 2002.
(2) A UCITS to which this Regulation applies shall operate under the Unamended Regulations up to and including 12 February 2004.
(3) Notwithstanding paragraph (2), a UCITS to which this Regulation applies may operate under the Amended Regulations, provided that the UCITS has obtained approval from the Bank to so operate.
(4) Notwithstanding paragraph (2), a UCITS to which this Regulation applies which is an umbrella fund may apply to the Bank to establish an additional sub-fund which sub-fund may operate under the Amended Regulations.
(5) As and from 13 February 2004 all UCITS to which this Regulation applies shall operate under the Amended Regulations.
Amendment of Regulation 2(1) of the Principal Regulations.
5. Regulation 2(1) of the Principal Regulations is amended by:
(a) inserting the following definitions:
‘Community Act’ means an act adopted by an institution of the European Communities;
‘money market instruments’ means instruments normally dealt in on the money market which are liquid, and have a value which can be accurately determined at any time;
‘OTC Derivative’ means a financial derivative instrument dealt in over-the-counter;
(b) substituting the following definition for the definition of “Directive”:
“ ‘Directive’ means the Council Directive of 20 December 1985 (85/611/EEC) on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as amended by Council Directive of 22 March 1988 (88/220/EEC), Directive No. (95/26/EC) of the Council and of the European Parliament of 29 June 1995 and Directive No. 2001/108/EC of the Council and of the European Parliament of 21 January 2002;”.
(c) substituting the following definition for the definition of “transferable securities”:
“ ‘transferable securities’ means—
(a) shares in companies and other securities equivalent to shares in companies (in these Regulations referred to as ‘shares’),
(b) bonds and other forms of securitised debt (in these Regulations referred to as ‘debt securities’),
(c) other negotiable securities which carry the right to acquire any such transferable securities by subscription or exchange,
other than the techniques and instruments referred to in Regulation 48A;”.
Amendment of Regulation 3 of the Principal Regulations.
6. The Principal Regulations are amended by substituting the following for Regulation 3:
“ Scope.
3. (1) Subject to paragraph (5), these Regulations apply to undertakings for collective investment in transferable securities (hereafter in these Regulations referred to as UCITS) situated in the State within the meaning of Regulation 9(1). Part X of these Regulations also applies to UCITS situated in another Member State within the meaning of Regulation 9(2), which propose to market units in the State.
(2) For the purposes of these Regulations and subject to paragraph (5) UCITS shall be undertakings—
(a) the sole object of which is the collective investment in either or both—
(i) transferable securities
(ii) other liquid financial assets referred to in Regulation 45,
of capital raised from the public and which operate on the principle of risk-spreading;
and
(b) the units of which are, at the request of holders repurchased or redeemed, directly or indirectly, out of those undertakings' assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not vary significantly from their net asset value shall be regarded as equivalent to such repurchase or redemption.
(3) Such undertakings may be constituted as—
(a) unit trusts, or
(b) investment companies with fixed capital, or
(c) investment companies with variable capital whose articles provide that
(i) the amount of the paid up share capital of the company shall at all times be equal to the net asset value of the company, and
(ii) the shares of the company shall have no par value,
or
(d) common contractual funds,
provided however that in the cases of (b) and (c) above the companies must be registered as public limited companies.
(4) These Regulations do not apply to investment companies whose assets are invested through the intermediary of subsidiary companies wholly or mainly otherwise than in transferable securities.
(5) These Regulations do not apply to—
(a) UCITS of the closed-ended type;
(b) UCITS which raise capital without promoting the sale of their units to the public within the Community or any part of it;
(c) UCITS the units of which, under the trust deed, deed of constitution or the investment company's articles, may be sold only to the public in non-member countries.”.
Amendment of Regulation 45 of the Principal Regulations.
7. The Principal Regulations are amended by substituting the following for Regulation 45:
“Permitted investments.
45. The investments of a UCITS must consist solely of any one or more of the following—
(a) transferable securities and money market instruments admitted to or dealt in on a regulated market within the meaning of Article 1(13) of Council Directive 93/22/EEC5 ;
(b) transferable securities and money market instruments dealt in on another regulated market in a Member State which operates regularly and is recognised and open to the public;
(c) transferable securities and money market instruments admitted to official listing on a stock exchange in a non-Member State or dealt in on another regulated market in a non-Member State which operates regularly and is recognised and open to the public provided that the choice of stock exchange or market has been approved by the Bank or is provided for in the trust deed, the deed of constitution or in the investment company's articles; and
(d) recently issued transferable securities, provided—
(i) the terms of issue include an undertaking that application will be made for admission to official listing on a stock exchange or to another regulated market which operates regularly and is recognised and open to the public, provided that the choice of stock exchange or market has been approved by the Bank or is provided for in the trust deed the deed of constitution or in the investment company's articles; and
(ii) such admission is secured within a year of issue.
(e) either or both—
(i) units of UCITS authorised according to the Directive,
(ii) other collective investment undertakings within the meaning of subparagraphs (a) and (b) of Regulation 3(2) should they be situated in a Member State or not, provided that:
(I) such other collective investment undertakings are authorised under laws which provide that they are subject to supervision considered by the Bank to be equivalent to that specified in a Community Act and that cooperation between authorities is sufficiently ensured;
(II) the level of protection for unit-holders in those other collective investment undertakings is equivalent to that provided for unit-holders in a UCITS, and in particular that the rules on segregation of assets borrowing, lending, and uncovered sales of transferable securities and money market instruments are equivalent to the requirements of the Directive;
(III) the business of those other collective investment undertakings is reported in half-yearly and annual reports to enable an assessment to be made of the assets and liabilities, income and operations over the reporting period.
No more than 10% of the assets of the UCITS or those other collective investment undertakings, whose acquisition is contemplated, can, according to their trust deed, deed of constitution, memorandum and articles of association or prospectus, be invested in aggregate in units of other UCITS or other collective investment undertakings;
(f) deposits with credit institutions which are repayable on demand or have the right to be withdrawn, and maturing in no more than 12 months, provided that the credit institution has its registered office in a Member State or, if the registered office of the credit institution is situated in a non-Member State, provided that it is subject to prudential rules considered by the Bank as equivalent to those specified in a Community Act;
(g) either or both—
(i) financial derivative instruments, including equivalent cash-settled instruments, dealt in on a regulated market referred to in paragraphs (a), (b) and (c),
(ii) OTC derivatives,
provided that:
(I) the underlying assets consist of instruments to which this Regulation refers, financial indices interest rates, foreign exchange rates or currencies in which the UCITS may invest according to its investment objectives as stated in the trust deed deed of constitution or memorandum and articles of association and prospectus of the UCITS,
(II) the counterparties to OTC derivative transactions are institutions subject to prudential supervision and belong to categories approved by the Bank,
and
(III) the OTC derivatives are subject to reliable and verifiable valuation on a daily basis and can be sold liquidated or closed by an offsetting transaction at any time at their fair value at the initiative of the UCITS;
(h) money market instruments, other than those dealt in on a regulated market, provided that the issue or issuer of such instruments is itself regulated for the purpose of protecting investors and savings and provided that they are:
(i) issued or guaranteed by a central, regional or local authority or central bank of a Member State, the European Central Bank, the European Union or the European Investment Bank, a non-Member State or, in the case of a federal State, by one of the members making up the federation, or by a public international body to which one or more Member States belong, or
(ii) issued by an undertaking any securities of which are dealt in on a regulated market referred to in paragraph (a), (b) or (c), or
(iii) issued or guaranteed by an establishment subject to prudential supervision, in accordance with criteria defined by a Community Act, or by an establishment which is subject to and complies with prudential rules considered by the Bank to be at least as stringent as those specified in a Community Act; or
(iv) issued by other bodies belonging to the categories approved by the Bank provided that investments in such instruments are subject to investor protection equivalent to that specified in subparagraph (i), (ii) or (iii) and provided that the issuer is a company whose capital and reserves amount to at least €10 million and which presents and publishes its annual accounts in accordance with Directive 78/660/EEC6 is an entity which, within a group of companies which includes one or several listed companies, is dedicated to the financing of the group or is an entity which is dedicated to the financing of securitisation vehicles which benefit from a banking liquidity line.”.
Amendment of Regulation 46 of the Principal Regulations.
8. The Principal Regulations are amended by substituting the following for Regulation 46:
“Limitations on investments.
46. (1) A UCITS may invest no more than 10 per cent of its assets in transferable securities and money market instruments other than those referred to in Regulation 45.
(2) An investment company may acquire real and personal property which is required for the purpose of its business.
(3) A UCITS may not acquire either precious metals or certificates representing them.
(4) For the purposes of this Regulation and of the following Regulations in this Part, ‘assets’, in relation to a UCITS, means the net assets of a UCITS.”.
Deletion of Regulation 47 of the Principal Regulations.
9. The Principal Regulations are amended by the deletion of Regulation 47.
Amendment of Regulation 48 of the Principal Regulations.
10. The Principal Regulations are amended by substituting the following for Regulation 48:
“Ancillary liquid assets.
48. A UCITS may hold ancillary liquid assets.”.
Insertion of new Regulations after Regulation 48 of the Principal Regulations.
11. The Principal Regulations are amended by the insertion of the following after Regulation 48:
“ Investment techniques and instruments.
48A. (1) A UCITS may employ techniques and instruments relating to transferable securities and money market instruments under and in accordance with conditions or requirements imposed by the Bank for the purpose of this Regulation (whether generally or in relation to the particular UCITS) provided that such techniques and instruments are used for the purpose of efficient portfolio management. When those operations concern the use of derivative instruments, the said conditions and requirements shall comply with the provisions of these Regulations.
(2) The said operations shall not, in any case, cause the UCITS to diverge from its investment objectives as laid down in the trust deed, deed of constitution, memorandum and articles of incorporation or prospectus.
Use of Derivative Instruments.
48B. (1) A management company or an investment company must employ a risk-management process which enables it to monitor and measure at any time the risk of the UCITS' positions and their contribution to the overall risk profile of the portfolio of assets of the UCITS; it must employ a process for accurate and independent assessment of the value of OTC derivatives. It must communicate to the Bank regularly and in accordance with particular requirements the Bank shall specify for that purpose the types of derivative instruments the underlying risks, the quantitative limits and the methods which are chosen in order to estimate the risks associated with transactions in derivative instruments regarding each managed UCITS.
(2) (a) A UCITS shall ensure that its global exposure relating to derivative instruments does not exceed the total net asset value of its portfolio.
(b) A UCITS may invest, as a part of its investment policy and within the limit specified in Regulation 49(6), in financial derivative instruments provided that the exposure to the underlying assets does not exceed in aggregate the investment limits specified in Regulation 49. Where a UCITS invests in index-based financial derivative instruments, these investments do not have to be combined with the limits specified in Regulation 49.
(c) When a transferable security or money market instrument contains an embedded derivative, the latter must be taken into account when complying with the requirements of this Regulation.
(3) For the purposes of paragraph (2), exposure is calculated taking into account the current value of the underlying assets, the counterparty risk, future market movements and the time available to liquidate the positions.
(4) The Bank shall, no later than 13 February 2004, send the Commission full information concerning the methods (including any revisions to them) that it uses to calculate the risk exposures mentioned in paragraph (2), including the risk exposure to a counterparty in OTC derivative transactions.”.
Amendment of Regulation 49 of the Principal Regulations.
12. The Principal Regulations are amended by substituting the following for Regulation 49:
“Investment in one issuer's securities.
49. (1) (a) A UCITS may invest no more than 10% of its assets in transferable securities or money market instruments issued by the same body provided that the total value of the transferable securities and the money market instruments held by the UCITS in the issuing bodies in each of which it invests more than 5% of its assets must not then exceed 40% of the value of its assets. This limitation does not apply to deposits and OTC derivative transactions made with financial institutions.
(b) A UCITS may not invest more than 20% of its assets in deposits made with the same body.
(c) The risk exposure to a counterparty of a UCITS in an OTC derivative transaction may not exceed
(i) in case the counterparty is a credit institution referred to in Regulation 45(f), 10% of its assets,
(ii) in any other case, 5% of its assets.
(2) Notwithstanding subparagraphs (a), (b) and (c) of paragraph (1), a UCITS may not, in excess of 20% of its assets, combine two or more of the following issued by, or made or undertaken with, the same body, namely—
(a) investments in transferable securities or money market instruments,
(b) deposits,
(c) exposures arising from OTC derivative transactions.
(3) (a) Notwithstanding paragraphs (1)(a) and (2), a UCITS may invest up to 25% of its assets in bonds that are issued by a credit institution which has its registered office in a Member State and is subject by law to special public supervision designed to protect bond-holders. In particular sums deriving from the issue of these bonds must be invested, in accordance with the law, in assets which during the whole period of validity of the bonds, are capable of covering claims attaching to the bonds and which, in the event of failure of the issuer, will be used on a priority basis for the reimbursement of the principal and payment of the accrued interest.
(b) When a UCITS invests more than 5% of its assets in the bonds referred to in subparagraph (a) and issued by one issuer, the total value of these investments may not exceed 80% of the value of the assets of the UCITS.
(c) The Bank shall send to the Commission a list of categories of issuers authorised, in accordance with the laws and supervisory arrangements mentioned in subparagraph (a that are in force in the State, to issue bonds complying with the requirements of that subparagraph. A notice specifying the status of the guarantees offered shall be attached to those lists.
(4) Notwithstanding paragraphs (1)(a) and (2), a UCITS may invest up to 35% of its assets in transferable securities or money market instruments that are issued or guaranteed by a Member State, by its local authorities, by a non-member State or by public international bodies of which one or more Member States are members.
(5) The transferable securities and money market instruments referred to in paragraphs (3) and (4) shall not be taken into account for the purpose of applying the limit of 40% referred to in paragraph (1)(a).
(6) The limits provided for in paragraphs (1), (2), (3) and (4) may not be combined, and thus exposure to the same body arising from investments in two or more of the following, namely
(a) transferable securities;
(b) money market instruments;
(c) deposits;
(d) derivative instruments,
carried out in accordance with paragraphs (1), (2), (3) and (4) shall under no circumstances exceed in total 35% of the assets of the UCITS.
(7) Companies which are included in the same group for the purposes of consolidated accounts, as defined in accordance with Directive 83/349/EEC or in accordance with recognized international accounting rules, shall be regarded as a single body for the purpose of calculating the limits contained in this Regulation. In this context a UCITS may combine investment in transferable securities and money market instruments within the same group up to a limit of 20% of its assets provided those investments comply with the other limits specified in this Regulation.”.
Insertion of new Regulation after Regulation 49 of the Principal Regulations.
13. The Principal Regulations are amended by the insertion of the following after Regulation 49:
“Index funds.
49A. (1) Without prejudice to the limits specified in Regulations 53, 54 and 55, the limit in Regulation 49 (1) (a) is raised to 20% for investments in shares or debt securities or both issued by the same body when, according to the trust deed, deed of constitution or articles of incorporation, the aim of the UCITS' investment policy is to replicate the composition of a certain stock or debt securities index which is recognised by the Bank, on the following basis:
(a) the index's composition is sufficiently diversified,
(b) the index represents an adequate benchmark for the market to which it refers, and
(c) the index is published in an appropriate manner.
(2) The Bank may raise the limit in Regulation 49 (1) (a) to a maximum of 35% where that proves to be justified by exceptional market conditions in particular in regulated markets where certain transferable securities or money market instruments are highly dominant. The investment up to this limit is only permitted for a single issuer.”.
Amendment of Regulation 50 of the Principal Regulations.
14. The Principal Regulations are amended by substituting the following for Regulation 50:
“Securities issued or guaranteed by States, local authorities or public international bodies.
50. (1) Provided the Bank is satisfied that unit-holders have protection equivalent to that of unit-holders in UCITS complying with the limits laid down in Regulation 49 it may authorise a UCITS to invest, in accordance with the principle of risk-spreading, up to 100 per cent of its assets in different transferable securities and money market instruments issued or guaranteed by any Member State, its local authorities, non-member State or public international bodies of which one or more Member States are members.
(2) Such a UCITS shall be required to—
(a) hold securities from at least six different issues, but securities from any one issue may not account for more than 30 per cent of its total assets;
(b) specify in its trust deed, deed of constitution or in its articles the names of the States, local authorities or public international bodies issuing or guaranteeing securities in which it intends to invest more than 35 per cent of its assets; and
(c) include a prominent statement in its prospectus and any promotional literature drawing attention to the Bank's authorisation and indicating the States, local authorities and public international bodies in the securities of which it intends to invest or has invested more than 35 per cent of its assets.”.
Amendment of Regulation 51 of the Principal Regulations.
15. The Principal Regulations are amended by substituting the following for Regulation 51:
“Investment in UCITS and other Collective Investment Undertakings.
51. (1) A UCITS may acquire the units of either or both—
(a) other UCITS,
(b) other collective investment undertakings referred to in Regulation 45(e),
provided that no more than 20% of its assets are invested in units of a single UCITS or other collective investment undertaking. Where the UCITS or other collective investment undertaking being invested in is established as an umbrella fund, each sub-fund of the umbrella fund may, subject to such conditions as may be imposed by the Bank, be regarded as if it were a separate UCITS or separate collective investment undertaking, for the purposes of applying this limit.
(2) Investments made by a UCITS in units of collective investment undertakings other than UCITS may not exceed, in aggregate, 30% of the assets of the UCITS.
(3) Where a UCITS has acquired units of UCITS or other collective investment undertakings or both, the assets of those underlying UCITS or other collective investment undertakings or both do not have to be combined for the purposes of the limits specified in Regulation 49.
(4) When a UCITS invests in the units of other UCITS or other collective investment undertakings or both and that UCITS and that or those other UCITS or undertakings are managed, directly or by delegation, by the same management company or by any other company with which the management company is linked by common management or control, or by a substantial direct or indirect holding, that management company or other company may not charge subscription or redemption fees on account of the investment of the UCITS in the units of such other UCITS or collective investment undertakings or both, as the case may be.
(5) A UCITS that invests a substantial proportion of its assets in other UCITS or other collective investment undertakings or both shall disclose in its prospectus the maximum level of the management fees that may be charged to both the UCITS itself and to the other UCITS or collective investment undertakings or both, as the case may be, in which it intends to invest. The annual report of the UCITS shall indicate the maximum proportion of management fees charged both to the UCITS itself and to the UCITS or other collective investment undertakings or both in which it invests.”.
Amendment of Regulation 52 of the Principal Regulations.
16. The Principal Regulations are amended by substituting the following for Regulation 52:
“Additional disclosure requirements.
52. (1) The prospectus issued by a UCITS in accordance with Regulation 74 shall clearly disclose the categories of assets in which the UCITS is authorised to invest. If a UCITS is authorised to engage in transactions in financial derivative instruments it must include a prominent statement to this effect, indicating—
(a) whether these operations may be carried out for the purpose of hedging or with the aim of meeting investment goals and
(b) the expected effect of these transactions on the risk profile of the UCITS.
(2) A UCITS which—
(a) invests principally in
(i) deposits;
(ii) UCITS or other collective investment undertakings or both;
or
(iii) financial derivative instruments;
or
(b) aims to replicate a stock or debt securities index in accordance with Regulation 49 A,
must include a prominent statement drawing attention to its investment policy in its prospectus and, where necessary, any other promotional literature.
(3) When the net asset value of a UCITS is likely to have a high volatility due to its portfolio composition or the portfolio management techniques that may be used, a prominent statement drawing attention to this characteristic must be included in its prospectus and, where necessary, any other promotional literature.
(4) The UCITS' management company or investment company shall supply to a unit-holder, on request by him or her, supplementary information in relation to—
(a) the quantitative risk management limits applied by it,
(b) the risk management methods used by it,
and
(c) the recent evolution of risks and yields for the main instrument categories with which the UCITS is involved.”.
Amendment of Regulation 54 of the Principal Regulations.
17. The Principal Regulations are amended by substituting the following for Regulation 54:
“Limits in relation to non-voting shares, debt securities or units of a UCITS.
54. (1) A UCITS may acquire no more than:
(a) 10% of the non-voting shares of any single issuing body;
(b) 10% of the debt securities of any single issuing body;
(c) 25% of the units of any single UCITS or other collective investment undertaking within the meaning of sub-paragraphs (a) and (b) of Regulation 3(2);
(d) 10% of the money market instruments of any single issuing body.
(2) The limits specified in subparagraph (b), (c) or (d) of paragraph (1 may be disregarded at the time of acquisition if at that time the gross amount of the debt securities or of the money market instruments, or the net amount of the securities in issue cannot be calculated.”.
Amendment of Regulation 55 of the Principal Regulations.
18. The Principal Regulations are amended by substituting the following for Regulation 55:
“Exemptions from Regulations 53 and 54.
55. The provisions of Regulations 53 and 54 shall not apply to—
(a) transferable securities and money market instruments issued or guaranteed by a Member State or its local authorities;
(b) transferable securities and money market instruments issued or guaranteed by a non-Member State;
(c) transferable securities and money market instruments issued by public international bodies of which one or more Member States are members;
(d) shares held by a UCITS in the capital of a company incorporated in a non-member State investing its assets mainly in the securities of issuing bodies having their registered offices in that State, where under the legislation of that State such a holding represents the only way in which the UCITS can invest in the securities of issuing bodies of that State. This derogation, however, shall apply only if in its investment policy the company from the non-Member State complies with the limits laid down in Regulations 49, 51, 52, 53 54, 56, 57 and 58. Where the limits set down in Regulations 49, 51 and 52 are exceeded, Regulations 56, 57 and 58 shall apply with necessary modifications; and
(e) shares held by an investment company or investment companies in the capital of subsidiary companies carrying on only the business of management, advice or marketing in the country where the subsidiary is located, in regard to the repurchase of units at unit-holders' request exclusively on its or their behalf.”.
Amendment of Regulation 56 of the Principal Regulations.
19. The Principal Regulations are amended by substituting the following for Regulation 56:
“Subscription rights.
56. A UCITS need not comply with the limits laid down in this Part when exercising subscription rights attaching to transferable securities and money market instruments which form part of their assets.”.
Amendment of Regulation 57 of the Principal Regulations.
20. The Principal Regulations are amended by substituting the following for Regulation 57:
“Derogations for recently authorised UCITS.
57. The Bank may allow recently authorised UCITS to derogate from Regulations 49, 49A, 50 and 51 for six months following the date of their authorisation, provided they observe the principle of risk-spreading.”.
Amendment of Regulation 71 of the Principal Regulations.
21. The Principal Regulations are amended by substituting the following for Regulation 71:
“Loans or guarantees.
71. (1) Without prejudice to Regulations 45, 46 and 48, neither—
(a) an investment company, nor
(b) a management company or trustee acting on behalf of a unit trust or a management company of a common contractual fund,
may grant loans or act as a guarantor on behalf of third parties.
(2) Paragraph (1) shall not prevent such undertakings from acquiring transferable securities, money market instruments or other financial instruments referred to in Regulation 45 (e), (g) and (h which are not fully paid.”.
Amendment of Regulation 72 of the Principal Regulations.
22. The Principal Regulations are amended by substituting the following for Regulation 72:
“Short Sales.
72. Neither —
(a) an investment company, nor
(b) a management company or trustee acting on behalf of a unit trust or a management company of a common contractual fund,
may carry out uncovered sales of transferable securities, money market instruments or other financial instruments referred to in Regulation 45 (e) (g) and (h).”.
Amendment of Schedule 1 B of the Principal Regulations.
23. The Principal Regulations are amended by the substitution of the following for Schedule 1 B:
“SCHEDULE 1 B
Information to be included in the periodic reports
I. Statement of assets and liabilities, including the following:
—transferable securities,
—bank balances,
—other assets,
—total assets,
—liabilities,
—net asset value.
II. Number of units in circulation.
III. Net asset value per unit.
IV. Portfolio, distinguishing between:
(a) transferable securities admitted to official stock exchange listing;
(b) transferable securities dealt in on another regulated market;
(c) recently issued transferable securities of the type referred to in Regulation 45(d);
(d) other transferable securities of the type referred to in Regulation 46(1);
and analysed in accordance with the most appropriate criteria in the light of the investment policy of the UCITS (e.g. in accordance with economic, geographical or currency criteria) as a percentage of net assets; for each of the above investments the proportion it represents of the total assets of the UCITS should be stated.
Statement of changes in the composition of the portfolio during the reference period.
V. Statement of the developments concerning the assets of the UCITS during the reference period including the following:
—income from investments,
—other income,
—management charges,
—trustee's charges,
—other charges and taxes,
—net income,
—distributions and income reinvested,
—changes in capital account,
—appreciation or depreciation of investments,
—any other changes affecting the assets and liabilities of the UCITS.
VI. a comparative table covering the last three financial years and including, for each financial year, at the end of the financial year:
—the total net asset value,
—the net asset value per unit.
VII. Details, by category of transaction within the meaning of Regulation 48A and 48B carried out by the UCITS during the reference period, of the resulting amount of commitments.”.
GIVEN under my Official Seal, this
29th day of May, 2003.
MARY HARNEY,
Minister for Enterprise, Trade and Employment.
EXPLANATORY NOTE
(This is not part of the instrument and does not purport to be a legal interpretation.)
The purpose of this Statutory Instrument is to give legal effect to the European Parliament and Council Directive No. 2001/108/EC of 21 January 2002. This is known as the “Product Directive”.
The Product Directive amended earlier Directives No. 85/611/EEC of 20 December 19851 , as itself amended by Council Directive No. 88/220/EEC of 22 March 19882 and European Parliament and Council Directive No. 95/26/EC of 29 June 19953 regarding the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities(UCITS).
The earlier Directives are given effect by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations (S. I. No. 211 of 29 May 2003) which amended and consolidated all previous Statutory Instruments governing UCITS.
This Statutory Instrument, S.I. No. 212 of 29 May 2003, amends S. I. No. 211 to give effect to the Product Directive which expands the product range for UCITS. A separate amending Statutory Instrument was necessary to set out the transitional and grandfathering provisions required for the implementation of the Product Directive.
This Statutory Instrument comes into operation on 29 May 2003.
1 O.J. No. L375/3 of 31/12/1985
2 O.J. No. L100/31 of 19/4/1988
3 O.J. No. L168/7 of 18/7/1995
4 O.J. No. L41/35 of 13/2/2002
5 OJ L 141/27 of 11/6/1993
6 OJ L 222/11 of 14/8/1978
1 O.J. No. L375/3 of 31/12/1985
2 O.J. No. L100/31 of 19/4/1988
3 O.J. No. L168/7 of 18/7/1995
