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Industry Updates

UCITS V: Agreement reached by European Parliament and Council

03 Mar 2014

On 25 February 2014, the European Parliament and Council reached an agreement on some outstanding issues in relation to the draft UCITS V directive (the "Draft Directive"). This reflects a final position on some specific UCITS regime enhancements that have been the subject of legislative debate since the first draft UCITS V proposals were released on 3 July 2012.

Key Elements


Remuneration rules will be introduced to deter excessive risk taking by managers of UCITS and increase transparency. The rules will be broadly consistent with those contained in the Alternative Investment Fund Managers Directive (2011/61/EC) ("AIFMD"). Prior initiatives, during the legislative process, to take the scope of these rules further than AIFMD (in terms of the nature of the rules and the range of persons they apply to) have not materialised.

The European Securities and Markets Authority ("ESMA") will draft guidelines on the scope of staff to be covered by the remuneration rules. 


The agreement reached requires each UCITS to appoint a single depositary and clarifies the categories of entity that shall be eligible to act as a depositary. 

The depositary's liability has also been adjusted, consistent with the standard of liability of a depositary under AIFMD.  This represents a higher standard than currently applied for UCITS.  


The agreement reached has also harmonised the administrative sanctions with maximum penalties of EUR5 million (or 10% of annual turnover) for a company or EUR5 million for individuals.  The use of criminal sanctions is also captured so as to ensure a harmonised approach across EU Member States.

Next Steps

Notwithstanding the agreement reached by the European Parliament and Council, the Draft Directive has yet to become law. A final vote on the text of the Draft Directive is expected to take place shortly.

The Draft Directive can then be expected to be implemented into national law across EU Member States by mid-2016. This timeline is indicative based on the information currently available and is subject to change.

For further information, please see the following links to our previous UCITS V client updates: Draft UCITS V Directive: Proposed bonus cap for fund managers rejected by the European Parliament and Draft UCITS V Directive: Assessment of Key elements or alternatively please speak with your usual Maples and Calder contact.

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