MAKING THE MOST OF UCITS IV

and oversight management and in terms of MiFID requirements). Based on your current organisation, you will probably pilot your UCITS from your headquarters. Depending of your geographical location, the time difference could require additional flexibility from your service provi- der (e.g. online reporting, local presence in your time zone, etc.).

retail fund providers, their main distribution channel – UK advisers (IFAs) – and product consumers.

You will have to define a precise distribution strategy and have a clear view on which products are going to be marketed in which country through which distribution channels.This will im- ply a strict selection and monitoring of the distributors you are going to involve in your fund distribution. NOTIFICATION PROCEDURE, KIID PRODUCTION & MAINTENANCE AND LOCAL DISTRIBUTION RULES Once you have defined the target countries where you want to market your UCITS, you will have to face additional challenges to implement your distribution strategy. First of all, you will have to request the registration of your UCITS in the target distribution countries by using the UCITS IV simplified notification process. It should be noted that you will have to comply with local marketing and distribution regulations in the host Member State .As such, you might have to cope with different local distribution requirements when marketing your UCITS in various countries. Producing and distributing the KIID will be a real challenge since it will have to be translated in the language of the country of distribution and any material change within the fund will require prompt revision of the document. It will demand timely notification to all regulators where the fund is registered for cross-border distribution and throughout its dis- tribution network. Outside EU, the KIID might not be recognised by local authorities such as in Hong Kong and Singapore, where you will have to produce other “KIID- like“ documents (respectively the KFS and PHS). Lastly, depending on the target countries of distribution, you might have to appoint local agents. For instance, you will have to appoint a local paying agent and a local information agent if you wish to market your funds in Germany or Switzerland, whereas in France you will be requested to appoint a centralising agent.

Working hand in hand with an expert European partner able to offer you a full “welcome package” to enter the UCITS market will be a key factor of success.

Challenges related to cross-border distribution of UCITS

As already described in the context of the client profile 1, you will have to face a number of issues when marketing your new UCITS around the world. DISTRIBUTION STRATEGY The first challenge will consist in identifying the right markets to target to successfully sell your funds cross-border. You will have to carry out a cost/benefit analysis, as well as a thorough market survey and understand the key specificities of each market. The main questions you should ask yourselves are: •Is there a local appetite for non-local products in the target countries? •Is the domiciliation of our UCITS fund suitable for distribution in the tar- get countries? For which investors? •Which fund distribution channel should be favoured? •How to develop our distribution network in the target countries? In these aspects, regulatory changes should be carefully monitored. Thus, in the UK, the FSA’s new Retail Distribution Review (RDR) regime, desig- ned to add further protection for retail investors and expected to operate from 2013, will undoubtedly change the way the market for retail invest- ments is structured and operated.The RDR will affect any fund that is dis- tributed to retail investors in the UK and change the relationship between

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