Dossier spécial Fund Forum 2011 - Interview with... Brice Henry, lawyer and partner, Allen & Overy

‘‘The practical implementation of Ucits IV will not be all smooth sailing’’

le 23/06/2011 L'AGEFI Hebdo

Are the French authorities well prepared for the transposition of the Ucits IV Directive?

The texts have been published gradually, but promptly, after consultation with asset management professionals. The French authorities have opted for a "literal transposition". In addition, the Financial Markets Authority (AMF) has produced a very comprehensive guide on the standard wording of a KIID (key investor information document), on which asset management companies and their service providers can rely. However, the practical implementation of the UCITS directive will not be all smooth sailing. For example, custodian banks still have to draft the agreements that they will sign with foreign asset management companies that want to set up funds under French law, in the framework of the asset management company passport.

Will formula funds, a French specificity, be given a specific treatment?

This poses a problem, since the directive provides for special information on structured UCITS and these formula funds are part of the structured fund category. An initial challenge will be to fit all the information into the three pages of the KIID and to interpret the rules properly, for example those concerning the various performance scenarios to be described. But above all, the distinctive feature of the French formula funds is that they guarantee that the management objective will be achieved, which is not provided for in the European provisions defining structured funds. The definition of this category is currently being fine-tuned to avoid a distortion of competition with non-guaranteed European structured UCITS.

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