UCITS IV - New
European fund legislation

The incorporation of the EU’s UCITS IV Directive into Swedish law has begun. The new fund legislation is designed to boost competitiveness while simultaneously retaining high levels of consumer protection. The Swedish Investment Fund Association has been represented on the legislative committee and has an internal working group that has been working on the legislative proposal.

UCITS IV will institute completely new investment fund legislation within the EU. Several of the proposals, such as the so-called fund company passport and the ability to merge funds, will make it easier for Swedish fund management companies to compete on the European fund market.

The goal is to try and create the optimum preconditions for fund activities in Europe, and the Association has been working, in parallel with the work mentioned above, to promote measures that will encourage Swedish companies to remain Sweden-based. 

The changes in brief:UCITS IV

  • The process for obtaining a licence to market and sell fund units in other EU countries will be simplified.
  • Cross-border fund mergers will be permitted.
  • So-called master/feeder constructions, whereby a fund – the feeder fund – mainly invests in another fund – the master fund – will be enabled.
  • Information for potential investors will be simplified and made more consumer-friendly. The simplified prospectus will be made more straightforward.
  • A fund management company passport will be introduced, enabling a fund to be managed in a country other than the one in which it is registered.
  • The cooperation between supervisory authorities will be generally strengthened and the EU Commission’s enforcement authority will be expanded.
  • The UCITS IV-directive should be implemented into Swedish law by the first of August 2011 at the latest.
  • Requirements to produce new simplified prospectuses, KIID (Key Investor Information Documents)
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