BELGIUM – Fortis Investments has obtained Ucits III status for its Luxembourg Sicav to allow it to market a wider range of products across Europe, but as the UK funds trade association identified further issues to create a single market.

The Fortis L Fund, with 90 subfunds, is still awaiting regulatory approval but from Monday was marketing its funds as being able to invest financial instruments that were permitted under the Ucits III legislation that came into force earlier this year.

Fortis, which managed €81bn at end of March, said it was one of the first fund management companies to market Ucits III funds on an international basis. And, as a direct consequence of UCITS III status, its fund managers could invest in money market products, other investment funds and bank deposits and said new funds were likely.

Compliance officer Karim Niraoui said: “The Ucits III directive is an excellent opportunity to fine-tune our investment offering and to disclose our level of investor protection. We are delighted to be one of the first investment companies to offer this level of investor protection and investment opportunity.”

The UK’s Investment Management Association also on Monday published, “Moving up a gear? A survey of the developments in the single market for asset management during 2003/04.”

The survey evaluated the progress made by the asset management industry since the publication of the Heinemann Report in 2003. It found a number of promising developments, such as an increasing recognition by the authorities of the distinctiveness of asset management and industry initiatives on the convergence of performance measurement. It also identified some retrograde steps such as inconsistent implementation of the new UCITS directive and new tax barriers in Belgium.

The association has, from the survey, identified three areas requiring further work. Registration, was increasingly anachronistic as it adds to costs and introduces delays and should be simplified or abolished, according to the IMA. The IMA also proposed a cross-border framework for ‘pooling’ is developed, which will again help achieve economies of scale.

Regarding mergers, the IMA said investment managers wishing to rationalise their portfolios were subjected to regulatory barriers and discriminatory tax treatment when merging funds, particularly cross-border and so it has convened a group of experts in order to consider the barriers to mergers and identify a way forward, which may require legislative change at EU level.

Sheila Nicoll, deputy chief executive of the IMA, said: “There is a real enthusiasm within the asset management industry to improve the single market and a considerable frustration at the barriers which get in the way. The European Commission and Committee of European Securities Regulators are recognising this and IMA’s proposals are the next stage in supporting them to remove cross-border barriers.”

These issues were all raised in the report of the Asset Management Expert Working Group, which was published in May. That report will be discussed this week at a conference convened by the European Commission to consider progress and prospects for financial integration in Europe.