The Danish Act on UCITS is being revised in a proposal tabled in April and which also includes the possibility of establishing 'NON-UCITS' in Denmark.
The existing Danish Act implements the EU UCITS Directives of 1985 and 1988. The new Act will permit the creation of associations similar to the 'NON-UCITS' contemplated in the Commission's proposal to amend the Directives.
Such associations are established in other EU member states. The Danish initiative is a preparation for the competition those associations will introduce, when the UCITS directives are amended and cross-border marketing may take place.
The proposed 'NON-UCITS' include investment associations (which may invest in gilt-edged securities issued by one issuer only) in money market funds, in funds of funds and in business development associations (including investment in equity in unquoted companies).
In 1996, Danish UCITS had assets in the amount of Dkr55 billion (US$8.5 billion) which is considered proportionally low compared to other EU member states.
The modernization of the UCITS rules and the introduction of 'NON-UCITS' is likely to enhance competition and the quality of investment opportunities and increase this ratio. In addition, small and middle-sized businesses may find a new source of venture capital.