The UK's Investment Management Association has backed the Committee of European Securities Regulators' (Cesr) advice on how to implement the management company passport.
It is now the European Commission’s job to establish the passport.
Previously, the European Commission chose not to include plans for a management company passport in amendments to the Ucits directive (Ucits IV). It asked Cesr to provide advice to aid the Commission’s development provisions permitting the introduction of a management passport under conditions consistent with a high level of investor protection.
In response, Cesr has set out detailed provisions designed to clarify the home member state of the management company, the Ucits scheme and the depositary. It calls for the new concept of the local point of contact to be put in place for remotely managed contractual funds.
Its advice also outlines the procedure to be followed when a Ucits scheme is authorised under the framework of the management company passport, including provisions on the conditions under which the competent authority of the Ucits home member state should approve the choice of the investment company.
Furthermore, it sets out measures about the ongoing supervision of management of funds and about dealing with breaches of rules governing the management of funds.
Full details of the advice are available at http://www.cesr.eu/popup2.php?id=5367.
Jarkko Syyrilä, director of international relations at the IMA, said: “Cesr’s advice clarifies once and for all the case for establishing the management company passport.”
However, the IMA believes the proposals could be improved by using existing mechanisms to fulfil the functions suggested for the role of a local contact point.
“The management company passport will significantly enhance the efficiency of the Ucits framework as asset managers will be able to manage investment funds cross-border without duplicating organisational and capital requirements,” said Syyrilä.
“We now urge the European Commission to take up Cesr's advice and include the passport within the Ucits IV package,” she added.
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