The UCITS framework

The UCITS Directive is a detailed, harmonised framework for investment funds that can be sold to retail investors throughout the EU. This means that funds authorised in one Member State can be marketed in another Member State using a passporting mechanism. Originally introduced in 1985 under the first UCITS Directive (EC) 85/11(UCITS Directive), the UCITS rules have been revised several times, most recently via the UCITS V Directive 2014/91/EU (UCITS V) which came into force on 18 March 2016.

UCITS V aims to bring the UCITS regime into line with the Alternative Fund Managers Directive 2011/61/EU AIFMD (AIFMD) on remuneration and depositary rules and introduce a range of corresponding measures: it clarifies the depositary role, introduces rules on remuneration policies to be applied to key members of the UCITS management company’s staff and harmonises minimum administrative sanctions for infringements to the UCITS rules. The AIFMD applies to managers of funds that are not UCITS, including hedge funds, private equity funds, and real estate funds. Taken together, the UCITS Directive and the AIFMD provide