[12693]
September 29, 2000
TO: INTERNATIONAL COMMITTEE No. 33-00
RE: INSTITUTE SUBMITS COMMENTS TO EUROPEAN COMMITTEE OF WISE MEN
REGARDING UCITS
To increase the overall effectiveness of a single financial services market in the European
Union, the European Commission and the French Presidency formed a committee of seven
“wise men” to review, in part, the regulation of the European securities markets. The
Committee of Wise Men requested comment, via the Internet, on a number of key issues
relating to an integrated European securities market. In response, the Institute has submitted
the attached comments that focus on regulatory barriers to a pan-European UCITS market.
Specifically, the Institute’s comments identify three principal problems under the UCITS
Directive: (1) the Directive is interpreted and implemented differently in member states; (2)
marketing rules are left to individual member states; and (3) the highly prescriptive definition
of what qualifies as a UCITS impedes innovation and does not permit the Directive flexibility to
accommodate market developments. To address these concerns, our comments recommend
that pending amendments to the UCITS Directive be adopted as soon as possible. The Institute
also recommends that marketing rules for UCITS funds be harmonized and that member states
work together to develop uniform interpretations of the UCITS Directive and harmonize
mutual fund regulation. Finally, the comments also recommend that member states replace
asset allocation requirements for pension plans with standards based on diversification and
prudence.
The Committee of Wise Men plans to publish its initial report in early November.
Jennifer S. Choi
Assistant Counsel
Attachment
Attachment (in .pdf format)