The Investment Management Association (IMA) has backed the creation of a passport for non-Ucits funds, including investment trusts and non-Ucits retail schemes (Nurs).
In its response to the European Union’s consultation on Ucits product rules, the asset manager trade body says a passport for funds investing in Ucits-eligible asses should be introduced.
It called for the creation of retail passports under a regime separate from Ucits and for the funds to be excluded from the Alternative Investment Fund Manager Directive (AIFMD).
“The regime would provide the European name/brand for these vehicles, such as non-Ucits retail funds,” it argues. “In large measure, the regime requirements would refer directly to the relevant Ucits requirements, but the investment and borrowing powers and redemption requirements would be different.”
Product regulation adviser Perry Braithwaite says it is important the European Union does not place “unnecessary additional restrictions or costs” on Ucits funds “to the extent that those with modest amounts to invest cannot achieve their longer-term aspirations in a cost-effective manner”.
Braithwaite says there have been “material differences” between interpretations of the existing Ucits rules by national regulators and the guidelines for assets, which has led to the approval of investment strategies in some EU countries but not others.
“It should be for ESMA [European Securities & Markets Association] to ensure consistency in the interpretation of Ucits rules,” he says.