Brussels, 12/09/2014 (Agence Europe) - An undertaking for collective investment in transferable securities (UCITS) that sells units in another member state is not required to ensure that the participant received delivery of the certificates for their investment, ruled the European Court of Justice on Thursday 11 September.
The case in which this ruling was given, C-88/13, is about Citiportfolios investment fund in Luxembourg, whose depository bank is Citibank Luxembourg, also based in Luxembourg. A Belgian resident of Belgium invested in the fund on the back of publicity by Citibank Belgium. Citiportfolios, however, swiftly asked the investor to withdraw his investment, which he didn't do. Citibank Luxembourg, which held the funds in question, therefore included the investor in a register of fund-holders. The Belgian investor demanded certificates from Citibank Belgium (“certificates representing shares”) to prove to Citibank Luxembourg that he was in fact the owner of the shares in question. But the Belgian bank refused to do so on the grounds that the investor should request the certificates from the company in Luxembourg directly.
The Belgian investor took the case to court, based on the UCITS Directive 85/611/EC and its provision that a UCITS must make payments to participants in the country where the fund is marketed. The Court of Justice was asked whether the notion of “payments to participants” also covered the delivery of named share certificates. The European judges ruled that the directive in question does not cover this issue at all, apart from the obligation to keep participants informed. (JK)