UCITS IV cross-border distribution - general overview

The simplified notification procedure is designed to remove bottlenecks in the procedure for cross-border distribution of Ucits funds. Power to grant the ‘passport’ is held by the fund’s home state regulator, while the regulators of member states into which the fund is to be marketed have no power of veto or delay, nor of review of marketing arrangements in advance of authorisation.
Once notification of marketing in another EU state has been submitted to the regulator of the fund domicile, it has a maximum of 10 working days to review it. Marketing of the fund may begin as soon as the fund domicile’s regulator has transmitted the notification (electronically) to the regulator of the state where the fund is to be marketed.
The new arrangement will involve regulators dealing directly with each other. At present, the fund manager has to complete a notification procedure involving the submission of numerous documents (in some cases translated) to the regulator of the target market, which then has up to two months to respond. The time taken by target market regulators to approve distribution for funds from other states currently ranges from just one day to the full two months.
Any changes to the marketing arrangements for a fund distributed in one or more other member state must be notified in advance to the target market regulator(s). The Ucits must ensure its marketing arrangements are compliant with the rules of the target market before asking its home regulator to launch the notification procedure.
These arrangements cover areas such as information to investors on fund ranges and prices, the appointment of local paying agents, representatives or distributors and the use of nominee structures, and any special information requirements designated by the target market regulator for local investors. Member states must publish full information on their local laws, regulations and other rules relating to the marketing of foreign Ucits “in a clear and unambiguous manner” and by electronic means (i.e. on a web site).