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UK Regulators Propose to Implement UCITS Management Directive
Washington, DC, January 22, 2003 - The UK Financial Services Authority (FSA) and Treasury have issued a consultation paper on a proposed UCITS Management Directive that would:
- introduce a new passport, allowing a UCITS management company to carry out cross-border investment services;
- impose new financial resource requirements and business conduct rules on the UCITS management company; and
- provide for a simplified prospectus to be used as a marketing document throughout the European Economic Area.
According to the FSA, the minimum financial resources standards and business conduct provisions in the proposed Management Directive are already met under FSA rules. The main changes proposed in the consultation paper would permit a UCITS management company to provide services now provided by firms authorized under the Investment Services Directive.
The Authorized Corporate Director (ACD) of a UK open-end investment company would be treated as a management company for the first time because of the “management company” definition in the amended UCITS Directive. The FSA notes that some ACDs may have to restructure their operations due to the lack of an Investment Services Directive passport once they are defined as UCITS management companies.