Council Directive of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (85/611/EEC) (repealed)

Section I U.K. General provisions and scope

Article 1 U.K.

1. The Member States shall apply this Directive to undertakings for collective investment in transferable securities (hereinafter referred to as UCITS) situated within their territories.

2. For the purposes of this Directive, and subject to Article 2, UCITS shall be undertakings:

• [F1 the sole object of which is the collective investment in transferable securities and/or in other liquid financial assets referred to in Article 19(1) of capital raised from the public and which operates on the principle of risk-spreading and]

• the units of which are, at the request of holders, re-purchased or redeemed, directly or indirectly, out of those undertakings' assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not significantly vary from their net asset value shall be regarded as equivalent to such re-purchase or redemption.

3. Such undertakings may be constituted according to law, either under the law of contract (as common funds managed by management companies) or trust law (as unit trusts) or under statute (as investment companies).

For the purposes of this Directive ‘common funds’ shall also include unit trusts.

4. Investment companies the assets of which are invested through the intermediary of subsidiary companies mainly otherwise than in transferable securities shall not, however, be subject to this Directive.

5. The Member States shall prohibit UCITS which are subject to this Directive from transforming themselves into collective investment undertakings which are not covered by this Directive.

6. Subject to the provisions governing capital movements and to Articles 44, 45 and 52 (2) no Member State may apply any other provisions whatsoever in the field covered by this Directive to UCITS situated in another Member State or to the units issued by such UCITS, where they market their units within its territory.

7. Without prejudice to paragraph 6, a Member State may apply to UCITS situated within its territory requirements which are stricter than or additional to those laid down in Article 4 et seq. of this Directive, provided that they are of general application and do not conflict with the provisions of this Directive.

[F2 8. For the purposes of this Directive, ‘ transferable securities ’ shall mean:

• shares in companies and other securities equivalent to shares in companies ( ‘ shares ’ ),

• bonds and other forms of securitised debt ( ‘ debt securities ’ ),

• any other negotiable securities which carry the right to acquire any such transferable securities by subscription or exchange,

excluding the techniques and instruments referred to in Article 21.

9. For the purposes of this Directive ‘ money market instruments ’ shall mean instruments normally dealt in on the money market which are liquid, and have a value which can be accurately determined at any time.]

Textual Amendments

F1 Substituted by Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), with regard to investments of UCITS.

F2 Inserted by Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), with regard to investments of UCITS.

[F3 Article 1a U.K.

For the purposes of this Directive:

1.

‘ depositary ’ shall mean any institution entrusted with the duties mentioned in Articles 7 and 14 and subject to the other provisions laid down in Sections IIIa and IVa;

2.

‘ management company ’ shall mean any company, the regular business of which is the management of UCITS in the form of unit trusts/common funds and/or of investment companies (collective portfolio management of UCITS); this includes the functions mentioned in Annex II;

3.

a ‘ management company's home Member State ’ shall mean the Member State, in which the management company's registered office is situated;

4.

a ‘ management company's host Member State ’ shall mean the Member State, other than the home Member State, within the territory of which a management company has a branch or provides services;

5.

a ‘ UCITS home Member State ’ shall mean:

(a)

with regard to a UCITS constituted as unit trust/common fund, the Member State in which the management company's registered office is situated,

(b)

with regard to a UCITS constituted as investment company, the Member State in which the investment company's registered office is situated;

6.

a ‘ UCITS host Member State ’ shall mean the Member State, other than the UCITS home Member State, in which the units of the common fund/unit trust or of the investment company are marketed;

7.

‘ branch ’ shall mean a place of business which is a part of the management company, which has no legal personality and which provides the services for which the management company has been authorised; all the places of business set up in the same Member State by a management company with headquarters in another Member State shall be regarded as a single branch;

8.

‘ competent authorities ’ shall mean the authorities which each Member State designates under Article 49 of this Directive;

9.

‘close links’ shall mean a situation as defined in Article 2(1) of Directive 95/26/EC (1) ;

10.

‘ qualifying holdings ’ shall mean any direct or indirect holding in a management company which represents 10 % or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the management company in which that holding subsists.

For the purpose of this definition, the voting rights referred to in Article 7 of Directive 88/627/EEC (2) shall be taken into account;

11.

‘ISD’ shall mean Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (3) ;

12.

‘parent undertaking’ shall mean a parent undertaking as defined in Articles 1 and 2 of Directive 83/349/EEC (4) ;

13.

‘ subsidiary ’ shall mean a subsidiary undertaking as defined in Articles 1 and 2 of Directive 83/349/EEC; any subsidiary of a subsidiary undertaking shall also be regarded as a subsidiary of the parent undertaking which is the ultimate parent of those undertakings;

14.

‘initial capital’ shall mean capital as defined in items 1 and 2 of Article 34(2) of Directive 2000/12/EC (5) ;

15.

‘own funds’ shall mean own funds as defined in Title V, Chapter 2, Section 1 of Directive 2000/12/EC; this definition may, however, be amended in the circumstances described in Annex V of Directive 93/6/EEC (6) .]

Textual Amendments

F3 Inserted by Directive 2001/107/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses.

Article 2 U.K.

1. The following shall not be UCITS subject to this Directive:

• UCITS of the closed-ended type;

• UCITS which raise capital without promoting the sale of their units to the public within the Community or any part of it;

• UCITS the units of which, under the fund rules or the investment company's instruments of incorporation, may be sold only to the public in non-member countries;

• categories of UCITS prescribed by the regulations of the Member States in which such UCITS are situated, for which the rules laid down in Section V and Article 36 are inappropriate in view of their investment and borrowing policies.

2. Five years after the implementation of this Directive the Commission shall submit to the Council a report on the implementation of paragraph 1 and, in particular, of its fourth indent. If necessary, it shall propose suitable measures to extend the scope.

Article 3 U.K.

For the purposes of this Directive, a UCITS shall be deemed to be situated in the Member State in which the investment company or the management company of the unit trust has its registered office; the Member States must require that the head office be situated in the same Member State as the registered office.

(1)

[F3 OJ L 168, 18.7.1995, p. 7 .

(2)

OJ L 348, 17.12.1988, p. 62 .

(3)

OJ L 141, 11.6.1993, p. 27 . Directive as last amended by Directive 2000/64/EC ( OJ L 290, 17.11.2000, p. 27 ).

(4)

OJ L 193, 18.7.1983, p. 1 . Directive as last amended by the 1994 Act of Accession.

(5)

OJ L 126, 26.5.2000, p. 1 . Directive as amended by Directive 2000/28/EC of the European Parliament and of the Council ( OJ L 275, 27.10.2000, p. 37 ).

(6)

OJ L 141, 11.6.1993, p. 1 . Directive as last amended by Directive 98/33/EC of the European Parliament and of the Council ( OJ L 204, 21.7.1998, p. 29 ).]

Textual Amendments

F3 Inserted by Directive 2001/107/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to regulating management companies and simplified prospectuses.