The Council of the European Union will vote today on a proposed amendment to the 1985 UCITS Directive, the legislation which regulates the coordination of laws, regulations and administrative provisions relating to UCITS funds, or Undertakings for Collective Investment in Transferable Securities. If the amendment is adopted, it will have a substantial impact on funds and fund companies in Europe, providing fund companies with considerable flexibility in cross-border business, according to analysts.

The UCITS Directive has jurisdiction over most funds in Europe, but is technically restricted to those funds which promote the sale of their units to the public in the European Union and have the sole objective of investing in transferable securities, according to Claude Kremer, a partner at Arendt & Medernach of Luxembourg. That leaves out certain types of funds, such as money-market funds, according to Kremer, who is also chairman of the Luxembourg Investment Funds Association, a trade association.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.