Has An Effective UCITS Management Company Finally Arrived?

Background to the Management Company Passport

The Management Company Passport (MCP) was first introduced in Directive 2001/107/EC (the Man Co Directive). However, the MCP has failed to work to date. This failure is largely due to a lack of clarity in the wording of certain sections of the Man Co Directive. In particular, it appears to prevent remote management (i.e. management from an EU member state other than the one in which the UCITS is domiciled) of UCITS constituted as contractual funds such as common contractual funds or unit trusts (contractual funds).

Furthermore, the extent to which the passport applies to Man Cos of UCITS investment companies has not been free from doubt. In January 2005¹, the Committee of European Securities Regulators (CESR) issued Level 2 guidelines² which provided clarification on the MCP procedures contained in the Man Co Directive. These guidelines indicated that the Man Co Directive does not provide for a Man Co to manage a UCITS