Luxembourg, 17/10/2000 (Agence Europe) - On Tuesday, the Ecofin Council reached a political agreement on the directive aimed at harmonising savings products and assets eligible for Undertakings for Collective Investment in Transferable Securities (UCITS). "This is the first important directive on financial services adopted in the past seven years. It is part of the priorities of the action plan on financial services" (which aims at integration of the European financial markets by 2005), commented the Council President and French Finance Minister, Laurent Fabius.
"The text approved today, which updates an obsolete 1985 text, is a response to the strong expectations of issuers and investors. It will give the flexibility needed for portfolio management but also for prudential guarantees (framework for management techniques hitherto non-regulated, strengthened obligations of information and transparency), continued the president. The directive mainly aims to enlarge, in addition to shares and securities, the range of assets that can be provided by UCITS throughout EU territory. It will allow the UCITS to invest in other investment funds and other UCITS (in respect of a 30% threshold for non-harmonised UCITS), in bank deposits and, in some conditions, in derived instruments and instruments of the non-negotiated monetary market on a regulated market issued by large companies. "Investment funds are a capital element for ensuring the Union has simple access to the capital market, to create jobs and innovate", commented European Tax Commissioner Frits Bolkestein. He recalled how important they are on European financial markets with, in 1999, over EUR 3,000 billion invested.
The text of the directive has still to be finalised, before formally confirming the agreement. "It will then be placed on ice until March", said Mr Fabius. At that date, an agreement should be re ached on a second directive aimed at regulating the management of UCITS and above all to create a "European passport" to allow them to operate throughout the Union. Both projects should still be the subject of a second reading at the European Parliament, according to codecision procedure, and should be implemented concurrently.