13 October 2014

Managers and depositaries take note: UCITS V now in force

UCITS V sets out new rules designed to increase the level of protection for investors in UCITS. Some notable measures include a restriction on the type of variable remuneration that may be paid to identified staff, the obligation for UCITS managers to disclose detailed information on their remuneration policy, and an extension of the liability of depositaries.

UCITS V sets out new rules designed to increase the level of protection for investors in UCITS. Some notable measures include a restriction on the type of variable remuneration that may be paid to identified staff, the obligation for UCITS managers to disclose detailed information on their remuneration policy, and an extension of the liability of depositaries.

The provisions on the remuneration policy, eligible depositaries and the duties of these depositaries are expected to have the biggest impact on the day-to-day practice of UCITS and their managers. It is therefore advisable to review current fund structures and arrangements with depositaries to prevent difficulties in meeting the 18 March 2016 deadline.

Some Dutch special purpose depositaries will need to investigate if they are able to meet the strict requirements under UCITS V and whether, in view of this, they wish to continue acting as depositaries.

For a more detailed overview of the most significant effects of UCITS V on UCITS and their managers, see In context of March 2014.