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The Financial Services Authority (FSA) today set out proposals to implement the EU Eligible Assets Directive (EAD) and the related Committee of European Securities Regulators (CESR) guidelines for operators of Undertakings for Collective Investments In Transferable Securities (UCITS) schemes. The EAD helps with the definition of which assets are eligible for UCITS schemes to invest in.
FSA Retail Policy Director Dan Waters said:
"Our proposals implement the EAD and the guidelines in a practical way which will help UK scheme operators promote their products freely into Europe. This European work, involving the European Commission, CESR and national regulators shows how common standards can be achieved across the EU in a practical and flexible way, working with the grain of the markets."
The principal benefits from implementation of the EAD are expected to be:
- an increase in the quality of UCITS products, resulting from an improvement in risk management within the funds;
- innovation through the launch of new products e.g. funds based on hedge fund indices; and
- a possible improvement in the efficiency of competition as a result of a more consistent interpretation of regulations by firms and regulators.
