MAKING THE MOST OF UCITS IV

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You will have to comply with a number of registration duties, local distribution and marketing rules. It will require a real expertise regarding international distribution of UCITS.

• Are you aware of the local post-registration requirements in your target countries of distribution? • Have you checked that your fund administrator has an adequate infrastructure and cross-border experience to satisfy local needs (e.g. German and Austrian tax reporting)? OPERATIONAL ASPECTS You should not overlook that in a cross-border environment, operatio- nal complexity will be exacerbated, due in particular to various time zones and languages, manual processes, lack of standardisation and difficulties for investors to access reliable and updated information. From a transfer agency prospective, experience of non domestic inves- tors will also be required, as well as the ability to be connected to the major fund distribution platforms such as NSCC in America, AllFunds in Spain, etc. Besides, you will also have to deal with the increasing complexity of your distribution networks, which will make the identification of your distri- butors, the monitoring of their activity per country and the trailer fee management much more difficult than in a pure domestic environment. The cross-border registration and distribution of your funds will inevitably require a wide expertise and a more sophisticated approach. Benefiting from the assistance of a versatile service provider (transfer agent, fund administration, distribution support) sufficiently experienced in the cross- border environment,with specialist capabilities and having a thorough knowledge of the specificities of the main countries of distribution of UCITS will be a key success factor to help you seize the new business development opportunities you have identified beyond your domestic borders.

POST-REGISTRATION DUTIES Once funds are registered, another key challenge will be to maintain that registered status in the various countries of distribution. You will have to cope with a series of specific financial reporting, statistical reporting and publication requirements, with specific formats differing from one country to another and translation requirements. Thus, in Germany andAustria, you will have to provide a specific and com- plex tax reporting if you want your foreign funds to be fiscally as attractive as domestic funds to local investors. Hence the ability of your fund to calculate the relevant figures, such as the publication at each NAV date of the “Aktiengewinn” (equity gain), “Zwischengewinn” (interim profit) and “Immobiliengewinn” (real estate profit) in Germany for fully transparent funds and deliver the relevant tax information to investors via financial data providers and financial newspapers will be crucial to avoid heavy taxation of investors. You will also have to comply with specific EU rules such as the Savings directive, which requires paying agents making cross-border interest pay- ments to EU individuals to obtain and verify certain information about those individuals and either to report information about the interest pay- ments to their domestic tax authorities or levy withholding taxes, depen- ding on jurisdictions. In this framework, a Taxable Income per Share (TIS), corresponding to the taxable value of each share for EUSD purposes in the event of a sale or redemption payment, and a Taxable Income at Distribu- tion (TID), corresponding to the taxable portion of each distribution for EU Savings Directive purposes, will have to be calculated and published via financial data providers or local financial newspapers when foreign funds are distributed to individuals in Austria, Belgium, Luxembourg or Switzer- land.The EU Savings Directive application proves particularly burdensome for UCITS as fund Management Companies are responsible for accurate TIS and TID calculations for the various jurisdictions.

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CACEIS - UCITS IV |  page 25