For immediate release: Thursday 22 March 2007 

IMA WELCOMES EU UCITS EXPOSURE DRAFT BUT MORE TO BE DONE ON MANAGEMENT COMPANY PASSPORT

IMA welcomes today's publication of the European Commission's exposure draft outlining the suggested improvements to the EU single market framework for investment funds (UCITS).

The eagerly awaited exposure draft provides important concrete proposals for increasing the efficiency of the European asset management industry amid growing global competition. 

The Commission's draft addresses the issues on which the industry has for some time been calling for action i.e. fund notification; mergers and pooling; the simplified prospectus; supervisory co-operation and the management company passport.

IMA is particularly concerned to ensure that the provisions relating to the management company passport deliver the desired efficiencies: the UCITS Directive when amended in 2001 provided a passport for a management company to operate a fund on a cross border basis, but because of ambiguities in text, this has not been delivered in practice. Significant barriers have thus arisen, creating unjustified additional costs.

Today's exposure draft suggests the possibility of a "partial" management company passport which would still require considerable administrative activities to be undertaken in the same member state as the fund.  IMA believes that this approach would significantly diminish the efficiency gain that the industry is looking to achieve with a management company passport and could be a step backward from the present situation. 
 
Sheila Nicoll, Deputy Chief Executive of the IMA, commented:

"We have come a long way: we now have very concrete evidence of the Commission's commitment to an efficient, globally competitive asset management sector in Europe and to strong investor protection. This consultation also heralds a new era of transparency and openness in the European decision-making processes.  IMA will continue to be fully engaged to ensure that the proposals deliver what the industry has been asking for, to the benefit of fund managers and investors alike"

The exposure draft can be found on the European Commission's website at http://ec.europa.eu/internal_market/securities/ucits/index_en.htm

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For further information, please contact:
Helen Stephenson, Communications Officer, IMA, 020 7831 0898

Out of hours contact:
Mona Patel, Head of Communications, IMA, 07834 089332