MAKING THE MOST OF UCITS IV

Management Company Passport

Key features

MiFID organisation rules

Such measures to be complied with the MC may be summarised as follows:

(i) Internal control mechanisms: senior mana- gement and supervisory function with the MC, permanent compliance, audit and risk management functions;

Cooperation rules with host member state regulator

• MiFID inducement rules; • Due Diligence requirements in the selection and ongoing monitoring of investments and review of delegation agreements. New rules of conduct (i) Particular conditions to be met by depo- sitaries to fulfil its duties regarding UCITS cross-border managed by MC; (ii) Standard agreements between depositary and MC. Depositary

(ii) Recording of transactions; (iii) Conflict of interest rules; (iv) Complaints handling.

HOME MEMBER STATE REGULATOR

Management Company

(i) RM process adequated for monitoring all risks to which UCITS is exposed; (ii) Independent RM function to assess, review and monitor risk management policy; (iii) Rules on RM methods (including valuation of OTC derivatives and calculation of global exposure. Risk Management (RM)

UCITS

Compliance with rules reconstitution and functioning of UCITS

Main questions that clients should address

Points of attention • MC, UCITS and third-party service pro- viders located in different jurisdictions may involve additional complexity to be balanced with the benefits of the increased flexibility gained through a consolidated cross-border manage- ment business model; • Alignment with MiFID rules may entail additional costs and a reshaping of the organisation structure, as mandatory in most cases for all MC (with or without passport) and self managed sicav; • Necessary to secure tax efficient arran- gements for MC, in particular as regards VAT applicable to management fees.

Is the MCP a better option for us,given our current MC’s (and/or self managed sicav’s) organisation,UCITS we manage and jurisdictions in which we are present?

How significant are the following items in our business model: Close physical presence with investors, tax efficiency,operating from our own local infrastructure and operational systems?

How could we use the MCP to create new business opportunities? In which countries?

In which country shall we domicile or re-allocate our MC? Should we establish branches thereof? Which criteria of choice shall we consider?

Have we thought about all the challenges linked to providing cross-border MC services (legal,operational, supervisory,marketing, tax, cost of set up, skilled staff familiar with the regulatory framework of the relevant jurisdictions in which the MC would enter, etc.)? How can our service providers (depositary, fund administrator, etc.) help us to successfully achieve mergers under UCITS IV, notably with regard to information process ? Do they have a broad experience with MCP and MiFID regulatory framework?

What actions are to be taken in order to comply with the new regulatory framework?