©2005 Investment Company Institute. All rights reserved. Information may be abridged and therefore incomplete.
Communications from the Institute do not constitute, and should not be considered a substitute for, legal advice.
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November 9, 2005
TO: INTERNATIONAL COMMITTEE No. 25-05
INTERNATIONAL OPERATIONS ADVISORY COMMITTEE No. 30-05
RE: CESR CONSULTATIONS RELATING TO THE UCITS DIRECTIVE
Within the last few weeks, the Committee of European Securities Regulators (CESR) has
published two consultation papers relating to UCITS funds. The consultation papers and the
deadlines for industry comment are described below.
Common Approach to UCITS Notification Procedures
CESR published a consultation paper on proposals for a common approach to the
notification procedures in the UCITS Directive. The consultation paper and related documents
are available on CESR’s web site at http://www.cesr-eu.org/consultation_details.php?id=70.
In the consultation paper, CESR proposes to draft guidelines to facilitate the consistency
of practices regarding UCITS notification procedure, thereby promoting convergence, certainty
and transparency in the supervisory practices of European regulators. CESR asks for input on a
number of areas relating to the notification process, including the two-month notification
process provided by the UCITS Directive and the treatment of sub-funds of umbrella fund
structures.
The deadline for comment on this consultation is January 27, 2006.1 As you know, we
firmly believe that improving the system of UCITS notifications is one of the most important
steps Europe can take to facilitate the cross-border sale of funds. We are thus likely to submit a
comment letter in response to this consultation. We will schedule a conference call with
members in December to discuss Institute member concerns and likely Institute comments.
Eligible Assets for UCITS Funds
CESR also published a consultation paper providing draft technical advice to the
European Commission regarding clarification of definitions concerning eligible assets for
1 A second consultation period is scheduled to start in April 2006, with final guidelines expected to be published in
June 2006.
2
investments of UCITS. This is the second CESR consultation on this topic. The consultation
paper and related documents are available on CESR’s web site at http://www.cesr-
eu.org/consultation_details.php?id=69.
The consultation paper addresses whether or to what extent some financial instruments
could be considered eligible assets for a UCITS fund in compliance with the definitions of
“transferable securities” and “money market instruments” and the list of authorized
investments under the UCITS Directive.
The consultation paper’s discussion of money market instruments may be of greatest
interest to Institute members.2 At a November 7th CESR hearing on this topic, commentators
expressed concern that CESR’s draft advice on money market instruments may not fully reflect
the range of money market instruments available in the market. Commentators also expressed
concern over CESR’s proposed use of remaining maturities of less than one year in the
discussion of eligible money market instruments and the use of amortized cost for valuation.3
As the second consultation on this topic, the comment period is very short, with
comments due on November 21, 2005. If you share the concerns over CESR’s draft advice
relating to money market instruments, or have other concerns about the consultation paper,
please let us know as soon as possible by contacting me at 202-371-5430 or rcg@ici.org or Glen
Guymon at 202-326-5837 or gguymon@ici.org.
Robert C. Grohowski
Senior Counsel - International Affairs
2 See pages 16-32 of the consultation paper for the discussion of money market instruments.
3 See paragraphs 54 and 56 and box 4 of the consultation paper.