Approved Exchange on UCITS Information Paperwork

A key attribute of Undertakings for the Collective Funding in Transferable Securities (“UCITS” fund) is the Key Investor Information Doc (“KIID”), which provides the retail investor with simplified data from the prospectus.

UCITS moreover qualify as Packaged Retail Funding and Insurance coverage protection Merchandise (“PRIIPS”). Since PRIIPs are required to do a Key Information Doc (“KID”), promoters of a UCITS fund had been technically to produce every the KIID along with the KID. Thus, these conflicting requirements would have created uncertainty for the retail investor.

Initially, an exemption was equipped for funding companies and administration companies who’re promoting a UCITS to proceed using a KIID under the UCITS framework with out the need for doing a KID as required by the PRIIPS legal guidelines. The exemption was initially given until the thirty first of December 2021, however it certainly was extended until the thirty first of December 2022.

In a spherical dated the twenty third of Would possibly 2022, the MFSA provides ‘Amendments to the Funding Corporations Rulebooks to Transpose and Implement EU Directives, Guidelines and EBA Pointers’. The fourth stage of this spherical pertains to the transposition of ‘Directive (EU) 2021/2261 of the European Parliament and of the Council of 15 December 2021 amending Directive 2009/65/EC as regards the utilization of key data paperwork by administration companies of UCITS’.

The seventh Recital of EU Directive 2021/2261 states that: “It must subsequently be laid down that the KID is to be considered to satisfy the requirements related to the vital factor investor data.” Furthermore, this recital supplies that the funding companies and administration companies which might be promoting a UCITS fund “should not be required by competent authorities to produce the vital factor investor data, and solely the KID should be equipped to those merchants.” In accordance with Article 2 of the Directive, this will grow to be environment friendly from the primary of January 2023.

Furthermore, the MFSA’s spherical provides Annex D, a doc containing the updates for Half BII of the Funding Corporations Tips for Retail Collective Funding Schemes. This annex introduces three new Regular License Conditions (“SLCs”). Whereas SLC 6.2.25 provides that these amendments will start making use of from the beginning of 2023, SLCs 6.2.23 and 6.2.24 current that retail merchants of UCITS is perhaps equipped with a KID under PRIIPS legal guidelines to suffice the KIID requirement under UCITS legal guidelines. Nonetheless, non-retail merchants of UCITS ought to nonetheless be given a KIID consistent with the UCITS framework.

Thus, the MFSA’s spherical on this EU directive removes the need to proceed suspending the exemption which is scheduled to expire on the end of 2022 and may current extra readability to retail merchants previous to creating their respective funding decisions. From a juridical perspective, these amendments consolidate the EU’s effort to protect retail merchants by way of the PRIIPS framework by allowing PRIIPS legal guidelines to efficiently supersede positive parts of UCITS legal guidelines referring to retail merchants.

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