State Street Releases Vision Report on UCITS IV

State Street, a provider of financial services to institutional investors, has released a report on Undertakings for Collective Investments in Transferable Securities (UCITS) IV. The report is the latest publication in State Street’s ‘vision’ series of thought-leadership papers intended to further increase awareness and understanding of key themes and trends facing institutional investors.

UCITS assets have grown rapidly to almost €4.8 trillion since the original UCITS directive in 1985. Today, 40% of UCITS funds are sold outside of the EU in Asia, the Middle East and Latin America, making them Europe’s most successful financial services export. State Street’s vision report, ‘UCITS IV: The Path to Greater Efficiency’, examines the opportunities presented by the latest evolution of the UCITS framework and explores the significance for the European asset management industry. UCITS IV aims to increase economies of scale and reduce costs for UCITS investors by introducing an improved regulatory environment that will increase cross-border efficiencies while enhancing choice, transparency and investor protection. In addition, the range of UCITS funds will widen to include some alternative fund products.

With UCITS IV set to be fully implemented into the national legislation of all 27 EU Member States by July 2011, the report assesses the likely impact of the directive and the strategies that asset managers should adopt.

The potential capability for easing marketing across European borders of the UCITS IV directive provides an opportunity to achieve greater efficiencies across a wider distribution network. “Given the many factors – tax, regulatory and operational – that will intersect when fund companies implement the directive, the time to act is now,” the report states. “Planning will take time – implementation of any changes will take longer. July 2011 is not as far away as it seems.”

“To make the most of the opportunities of UCITS IV, asset managers should seek to develop the right strategies for their specific circumstances, based on a holistic assessment of their entire European operations,” said Mike Karpik, senior managing director of State Street Global Advisors (SSgA), the asset management business of State Street.


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