Brussels, 31/05/2000 (Agence Europe) - In the context of the action plan for financial services (see above), the European Commission has revised its proposals aimed at modernising Community legislation applicable to undertakings for collective investment in transferable securities (UCITS).
The Community has had legislation in the matter since 1985: in 1998, the Commission had proposed revising it to broaden the scope of allowable investments and update the rules on management techniques, to take account of the rapidly changing financial environment. The previous Parliament had been unable to complete its "first reading" on these projects before the European elections of June 1999; the current Parliament had to start again from first reading, and voted in April. The Commission has taken account of this opinion, and altered its proposal by introducing several amendments requested by Parliament. It is now up to he Council to decide, before sending the drafts back to Parliament for second reading. The proposals aim essentially:
a) the first, at lifting the obstacles that remain to the marketing of UCITS shares beyond borders, by broadening the scope of instruments in which these funds may place their assets. As we stand, this possibility is limited to shares and bonds; it would be extended to "cash funds". Money market instruments, financial derivatives, and in other units of other UCITS, etc.
b) the second, to create a "European passport" for the exercise of UCITS activities, while strengthening the protection of the investor to guarantee that the intermediaries are solid, serious and professional institutions, and that they are subject to a surveillance authority. It also introduces a simplified prospectus offering investors more accessible information.
The commissioner for the Internal Market Frits Bolkestein stressed that UCITS allow everyone to invest, even with limited means, and that they represent a fundamental segment of European financial markets (over 3,000 billion euro invested in 1999). The creation of a unified market in this field is therefore very important for the citizen and for the creation of a single European financial market that the Lisbon Summit planned for 2005.