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Hedgeweek Comment: Ucits IV delay may be justified

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Reports that the Ucits IV project might be delayed or scrapped altogether should hardly come as a surprise to those following the financial crisis.


Reports that the Ucits IV project might be delayed or scrapped altogether should hardly come as a surprise to those following the financial crisis.

But what is the reasoning behind the delay? The EU has said that the deadline of April 30 to publish a draft directive outlining the new proposals will now be missed. This has created a widespread raft of displeasure, most notably among members of the European Parliament.

The concept of fund passporting and a pan-European single market for investment funds is, in general, a good one. Many if not all industry players are in favour of a full management company passport as it is perhaps the most efficient solution from the asset management side and it also poses no real problems from a servicing point of view. The industry desperately needs a single market to be competitive and wants this package finalised because of the many benefits to the funds industry.

But while there is a widespread belief that the European Commission might prefer a ‘partial’ management company passport, it’s also possible that Charlie McCreevy, the commissioner responsible for the internal market and services, might have deferred publication of the draft directive because of the continuing financial crisis and the potential spillover effects from the launch of the new legislation. Determining the impact of the current financial uncertainly is not easy and might justify a decision to put the Ucits IV project on hold.

After all, McCreevy, an Irishman who as finance minister between 1997 and 2004 contributed to his country’s emergence as a European financial services hub, must be as well placed as anyone to make the right decision.

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