MAKING THE MOST OF UCITS IV

regime, designed to add further protection for retail investors and expected to operate from 2013, will undoubtedly change the way the market for retail investments is structured and operated. The RDR will affect any fund that is distributed in the UK to retail in- vestors and change the relationship between 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 imply 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 to market your UCITS, you will face additional challenges to implement your distribution strategy. First of all, you will have to request the registration of your UCITS in the target countries of distribution by using the UCITS IV simplified notification process. It should be noted that you will have to comply with local marke- ting and distribution regulation in the host Member State . As such, you might have to cope with different local distribution require- ments 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 distri- bution and any material change within the fund will require prompt

revision of the document. It will inherently necessitate a timely noti- fication to all regulators where the fund is registered for cross-border distribution and throughout its distribution network. Outside the 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.

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.

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 re- porting and publication requirements, with specific formats differing from one country to another and translation requirements. Thus, in Germany and Austria, you will have to provide a specific and complex 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” (in- terim 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

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