As the Ucits V review draws closer, some market
participants are concerned that proposals to distinguish
between complex and non-complex Ucits (undertakings for
collective investment) could lead to too many funds being
excluded from the retail market.
Freddie Brausch, a Luxembourg-based partner with Linklaters
conceded that the EC is giving serious thought to introducing
this classification. However, he said that questions remain
over where to draw the line when distinguishing between complex
and non-complex funds.
Some lawyers believe that many funds will be treated as
complex and so will not benefit from the lighter touch
regulatory approach. The effect would be to limit the way they
can be sold to retail investors.
Rating agency fuels speculation
Standard and Poor’s (S&P) recently fuelled
this speculation that the EC is going to reduce the investment
scope of Ucits funds.