MAKING THE MOST OF UCITS IV

Profile 2

The following scenarios can be considered:

Possible scenarios

Merger of your local UCITS into a UCITS range in a cross-border distribution centre (e.g. Luxembourg, Ireland) or in a country which has recently positioned itself in cross-border distribution (e.g. France, UK)

Scenario 1

Merger of your local UCITS into a UCITS range in a cross-border distribution centre (e.g. Luxembourg, Ireland) while keeping your domestic UCITS range

Scenario 2

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Creation of a UCITS range in a cross-border distribution centre, while transforming your domestic UCITS range into feeder UCITS of the master UCITS in Luxembourg or Ireland

Scenario 3

Creation of local feeder structures, the master being a UCITS in a cross-border distribution centre (e.g. Luxembourg, Ireland)

Scenario 4

Creation of local feeder structures, the master being a UCITS in a cross-border distribution centre (Luxembourg or Ireland) while keeping your domestic UCITS range

Scenario 5

Company as your UCITS funds, then the use of the Management Com- pany passport becomes more complex. You might also review your distribution network to enhance your funds’ market penetration.

Finding a partner whith legal and operational expertise that is able to discuss your rationalisation strategy, lead and coordinate the implementation of your strategy will be a key success factor.

Implementation considerations & points of attention

PRODUCT SIDE On the product side, the ideal rationalisation would be to remain with a global platform domiciled in a single jurisdiction. Indeed it would present the most cost-effective solution at governance, over- sight and operating levels. However, various factors (e.g. distribution requirements, tax hurdles) may make this a non-realistic short-to medium-term goal. Therefore, alternative scenarios might have to be considered to im- prove your current model (e.g. master-feeder structures, operating hubs).

Main challenges

The main challenge is undertaking any restructuring move while dealing with older products and an existing infrastructure, in order to preserve your current client base and development strategy. The complexity is high at product and Management Company level and both are closely interdependent. The implementation timeline is another important factor in terms of distribution risk and cost.

CACEIS - UCITS IV |  page 17